UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                                    FORM 10-K

         [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

                For the fiscal year ended December 31, 2002

                                    OR

       [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

            For the transition period from ________ to ________

                     Commission file number 333-17795

                         WATERFORD GAMING, L.L.C.
          (Exact name of registrant as specified in its charter)

             Delaware                      06-1465402
   (State or other jurisdiction of       (IRS Employer
    incorporation or organization)     Identification No.)

    914 Hartford Turnpike, P.O. Box 715
            Waterford, CT                      06385
  (Address of principal executive offices)   (Zip Code)

Registrant's telephone number, including area code (860) 442-4559

Securities registered pursuant to Section 12(b) of the Act:

       NONE
Title of each class     Name of each exchange on which registered



Securities registered pursuant to Section 12(g) of the Act:
                        NONE
                   (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days: Yes X No.

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K: Not applicable.

                         WATERFORD GAMING, L.L.C.
                            INDEX TO FORM 10-K

PART I.                                                      PAGE

Item 1.   Business                                              1
Item 2.   Properties                                            7
Item 3.   Legal Proceedings                                     7
Item 4.   Submission of Matters to a Vote of Security Holders   7

PART II.

Item 5.   Market for Registrant's Common Equity and
          Related Stockholder Matters                           8
Item 6.   Selected Financial Data                               8
Item 7.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                   9
Item 7a.  Quantitative and Qualitative Disclosures about
          Market Risk                                          13
Item 8.   Financial Statements and Supplementary Data          13
Item 9.   Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure                  13

PART III.

Item 10.  Directors and Executive Officers of the Registrant   14
Item 11.  Executive Compensation                               15
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management                                           15
Item 13.  Certain Relationships and Related Transactions       16

PART IV.

Item 14.  Control Proceedures                                  17
Item 15.  Exhibits, Financial Statement Schedules and
          Reports on Form 8-K                                  18

Signatures                                                     22
Certifications                                                 23


                                  PART I

Certain Forward Looking Statements
----------------------------------

Certain  information  included in this Form 10-K and other materials filed or to
be filed by Waterford  Gaming,  L.L.C.  (the  "Company") with the Securities and
Exchange Commission (the "Commission") (as well as information  included in oral
statements  or  other  written  statements  made or to be  made by the  Company)
contains  forward-looking  statements,  within the meaning of Section 27A of the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act of 1934,  as  amended.  Such  statements  include,  but are not  limited to,
information  relating to the Mohegan Sun Casino (the  "Mohegan  Sun")  including
plans for future expansion and other business development activities,  financing
sources,  the effects of regulation  (including  gaming and tax  regulation) and
competition. Any forward-looking statements included herein do not purport to be
predictions of future events or circumstances. Forward-looking statements can be
identified by, among other things, the use of  forward-looking  terminology such
as  "believes",  "expects",  "may",  "will",  "should",  "seeks",  "pro  forma",
"anticipates",  "intends",  or the  negative of any thereof or other  variations
thereon or comparable  terminology.  Such  forward-looking  information involves
important risks and uncertainties  that could  significantly  affect anticipated
results in the future  and,  accordingly,  such  results  may differ  from those
expressed in any forward-looking statements made by or on behalf of the Company.


ITEM 1. BUSINESS

A.  GENERAL

The  Company is a special  purpose  company,  formed  solely for the  purpose of
holding its  partnership  in Trading  Cove  Associates  ("TCA"),  a  Connecticut
general partnership and the manager (until January 1, 2000) and developer of the
Mohegan Sun. The Company also invested in certain financial  instruments  issued
by the Mohegan  Tribal  Gaming  Authority  (the  "Authority").  The Company is a
Delaware  limited  liability  company  formed on September  30, 1996.  Waterford
Gaming  Finance Corp.  ("Finance"),  a Delaware  corporation,  is a wholly owned
subsidiary of the Company.  The principal  executive  offices of the Company and
Finance are located at 914 Hartford Turnpike,  Waterford,  Connecticut 06385 and
their telephone number is (860) 442-4559.



The Limited  Liability  Company  Agreement of the Company (the  "Agreement")  is
effective  until  September 30, 2020 and may be terminated by the member or upon
the occurrence of events as stated in the Agreement.  The Agreement provides for
the property, affairs and business of the Company to be managed by a four-member
Board of Directors  which consists of two directors  appointed by Slavik Suites,
Inc.  ("Slavik") and two directors  appointed by LMW  Investments,  Inc. ("LMW")
(the "Board of  Directors").  A quorum for the Board of  Directors  requires all
four  members.  LMW and Slavik  initially  contributed  capital  to the  Company
consisting of all of their respective interests in TCA. Prior to the offering of
the Company's and Finance's  12-3/4% senior notes due November 15, 2003 of which
$65,000,000  in aggregate  principal  amount was issued on November 8, 1996 (the
"$65 Million Senior Notes"),  Slavik and LMW were partners of TCA. In connection
with the  formation  of the  Company,  Slavik  and LMW each  contributed  to the
Company their  interests in TCA in exchange for a 66-2/3% and 33-1/3%  ownership
interest, respectively, of the Company. Upon consummation of the offering of the
$65 Million  Senior  Notes,  (i)  $6,666,667  of the proceeds  were  distributed
directly to Slavik for the purpose of redeeming certain  ownership  interests in
Slavik,  and (ii)  $3,333,333 of the proceeds were  distributed to LMW, which in
turn loaned such proceeds to Len and Mark Wolman, as individuals,  who used such
funds to purchase certain interests in Slavik. The Company used $10.6 million of
the proceeds  from the offering of the $65 Million  Senior Notes to purchase RJH
Development Corp.'s ownership interest in TCA. As a result of these transactions
(collectively the "Reorganization"),  Slavik and LMW owned 67.7967% and 32.2033%
of the Company,  respectively. The Company is a managing general partner of TCA.
As a result of the Reorganization,  the only two partners of TCA are the Company
and Kerzner Investments Connecticut Inc. ("Kerzner  Investments"),  formerly Sun
Cove Limited.

In connection  with the  Company's  and Finance's  issuance on March 17, 1999 of
$125 Million  9-1/2% senior notes which mature March 15, 2010 (the "$125 Million
Senior  Notes"),  each of  Slavik  and LMW  have  contributed  their  respective
interests in the Company  concurrently to a Delaware limited liability  company,
Waterford Group, L.L.C. (the "Waterford Group"). Waterford Group is now the sole
member of the Company. Slavik and LMW own Waterford Group in the same respective
interest as they had in the Company and are as follows:


     Slavik Suites, Inc.                67.7967%
     LMW Investments, Inc.              32.2033%
                                       ---------
                                       100.0000%
                                       =========

Upon  consummation of the offering of the $125 Million Senior Notes, (i) the $65
Million Senior Notes were redeemed,  (ii) a distribution of $37,050,000 was made
by the Company to its sole  member  Waterford  Group and (iii) $2.0  million was
paid to a former partner of TCA, Leisure Resort Technology, Inc. ("Leisure"), in
satisfaction of a contractual obligation.

Additional capital contributions may be made to the Company by its member. If it
is determined  that the Company  requires  additional  funds,  such funds may be
loaned  to the  Company  by its  member  pursuant  to the terms set forth in the
Agreement;  however,  the  indenture,  between the Company and  Finance,  as the
Issuers,  and U.S. Bank Corporate Trust Services,  as Trustee,  relating to $125
Million  Senior Notes (the  "Indenture"),  prohibits the Company from  incurring
additional  indebtedness.  The Agreement  also provides that any disputes  which
arise under the  Agreement  and which  remain  unresolved  after 30 days will be
settled through arbitration.

                                        1

LMW, one of the two members of Waterford  Group, is a development  firm based in
southeastern Connecticut.  LMW is owned by Len Wolman and Mark Wolman. The other
member of Waterford Group, Slavik, is based in Detroit,  Michigan. The Directors
of Slavik are Del J. Lauria, Len Wolman, Mark Wolman and Stephan F. Slavik.

The $125  Million  Senior  Notes  bear  interest  at a rate of 9-1/2% per annum,
payable semi-annually in arrears on March 15 and September 15 which commenced on
September 15, 1999.

The  principal  amount of the $125 Million  Senior Notes is payable on March 15,
2010.  The Company and Finance may elect to redeem the $125 Million Senior Notes
at any  time on or  after  March  15,  2004 at a  redemption  price  equal  to a
percentage (105.182% after March 14, 2004, and declining to 104.318% after March
14, 2005, 103.455% after March 14, 2006, 102.591% after March 14, 2007, 101.727%
after March 14, 2008, 100.864% after March 14, 2009, and to 100% after March 14,
2010) of the principal  amount thereof plus accrued  interest.  The $125 Million
Senior  Notes  provide  that  upon the  occurrence  of a Change of  Control  (as
defined),  the holders thereof will have the option to require the redemption of
the  $125  Million  Senior  Notes  at a  redemption  price  equal to 101% of the
principal amount thereof plus accrued interest.

If the Company and Finance have any Company  Excess Cash, as defined,  they must
redeem the $125  Million  Senior Notes (on a  semi-annual  basis on March 15 and
September 15) at a redemption price equal to a percentage  (109.500% after March
15, 1999 and declining to 108.636%  after March 14, 2000,  107.773%  after March
14, 2001, 106.909% after March 14, 2002, 106.045% after March 14, 2003, 105.182%
after March 14, 2004,  104.318%  after March 14, 2005,  103.455% after March 14,
2006,  102.591% after March 14, 2007,  101.727%  after March 14, 2008,  100.864%
after  March 14,  2009,  and to  100.000%  after  March 14,  2010).  In  certain
circumstances,  if either the Company or its partner in TCA exercises the option
to buy or sell partnership interests in TCA, the Company and Finance must redeem
the $125 Million  Senior Notes.  As of December 31, 2002 and March 17, 2003, the
Company had redeemed $16,993,000 and $22,651,000,  respectively, of $125 Million
Senior Notes.

The  Indenture  relating  to the $125  Million  Senior  Notes  contains  certain
affirmative and negative covenants  customarily  contained in agreements of that
type,  including  without  limitation,   covenants  that  restrict,  subject  to
specified  exceptions  the Company's and Finance's  ability to (i) borrow money,
(ii) pay dividends on stock or make certain other restricted payments, (iii) use
assets as security in other transactions,  (iv) make investments, (v) sell other
assets or merge with other  companies and (vi) engage in any business  except as
currently  conducted or contemplated or amend their  relationship  with TCA. The
Indenture also provides for customary events of default and the establishment of
a restricted investment fund with a trustee for interest reserves.

The Company has one primary source of revenue and cash flow: payments from TCA.

Trading Cove Associates
-----------------------

TCA was  organized  on July 27,  1993.  The  primary  purpose of TCA has been to
assist the  Mohegan  Tribe of  Indians  of  Connecticut  (the  "Tribe")  and the
Authority,  an instrumentality  of the Tribe, in obtaining federal  recognition,
negotiate  the  tribal-state  compact  with  the  State of  Connecticut,  obtain
financing for the  development of the Mohegan Sun located on certain Tribal land
in Uncasville,  Connecticut,  negotiate the Amended and Restated Gaming Facility
Management Agreement (the "Management  Agreement") and participate in the design
and  development  of the Mohegan Sun which  commenced  operations on October 12,
1996.  Since the opening of the Mohegan Sun and until  January 1, 2000,  TCA had
overseen the Mohegan  Sun's  day-to-day  operations.  The TCA  partnership  will
terminate on December 31, 2040, or earlier,  in accordance with the terms of the
partnership agreement. The Company has a 50% voting and profits interest in TCA.
The  remaining  50%  interest is owned by Kerzner  Investments,  an affiliate of
Kerzner International Limited ("Kerzner International").


Trading Cove Associates Material Agreements
-------------------------------------------

Relinquishment Agreement
------------------------

Under the terms of an agreement (the  "Relinquishment  Agreement") TCA continued
to manage the Mohegan Sun under the Management  Agreement until January 1, 2000.
On December 31, 1999 the Management  Agreement  terminated and the Tribe assumed
day-to-day management of the Mohegan Sun. Under this Relinquishment Agreement to
compensate TCA for terminating its rights under the Management Agreement and the
Hotel/Resort Management Agreement,  the Authority has agreed to pay to TCA 5% of
Revenues, as defined,  (the "Relinquishment  Fees") generated by the Mohegan Sun
including the significant  expansion  project (the "Project") during the 15-year
period commencing on January 1, 2000.


                                        2



The  payments  under the  Relinquishment  Agreement  will be divided into senior
relinquishment  payments and junior relinquishment  payments, each of which will
be 2.5% of "Revenues". Revenues are defined as gross gaming revenues (other than
Class II gaming revenue, i.e. bingo) and all other facility revenues (including,
without limitation,  hotel revenues,  food and beverage sales, parking revenues,
ticket revenues and other fees or receipts from the convention/events  center in
the  expansion  and all rental or other  receipts  from  lessees,  licensees and
concessionaires  operating in the  facility  but not the gross  receipts of such
lessees, licensees and concessionaires).  Revenues exclude revenues generated by
any future expansion of the Mohegan Sun, after completion of the Project. Senior
relinquishment payments will be payable quarterly in arrears commencing on April
25, 2000 for the quarter  ended March 31,  2000,  and the junior  relinquishment
payments will be payable  semi-annually  in arrears  commencing on July 25, 2000
for the six months ended June 30, 2000.



A summary of relinquishment payments received by TCA is as follows:

                           Senior              Junior             Total
                          -----------         -----------        -----------
April 25, 2002            $ 6,228,559         $   ---            $ 6,228,559
July 25, 2002               7,104,939          13,333,500         20,438,439
October 25, 2002            8,171,882             ---              8,171,882
January 27, 2003            7,748,971          15,920,852         23,669,823
                          -----------         -----------        -----------
Relinquishment Fees
 for the year ended
  December 31, 2002       $29,254,351         $29,254,352        $58,508,703
                          ===========         ===========        ===========

April 25, 2001            $ 5,090,622         $   ---            $ 5,090,622
July 25, 2001               5,472,900          10,563,521         16,036,421
September 7, 2001              68,233              68,234            136,467
October 25, 2001            5,765,232             ---              5,765,232
January 25, 2002            6,460,672          12,225,904         18,686,576
                          -----------         -----------        -----------
Relinquishment Fees
 for the year ended
   December 31, 2001      $22,857,659         $22,857,659        $45,715,318
                          ===========         ===========        ===========






The  Relinquishment  Agreement  provides  that  each of the  senior  and  junior
relinquishment  payments  are  subordinated  in right of  payment  to payment of
senior secured obligations  including the Authority's bank credit facility,  and
that the junior  relinquishment  payments are further subordinated to payment of
all other senior  obligations  including the Authority's 8-1/8% Senior Notes due
2006.  The  Relinquishment  Agreement  also  provides  that  all  relinquishment
payments  are  subordinated  in right of payment to an annual  minimum  priority
distribution to the Tribe from the operations of the Mohegan Sun.

Under the  Relinquishment  Agreement,  the Authority makes certain covenants for
the benefit of TCA, including the following:

     (1)  Payments to the Tribe.  Except for  payments  of the minimum  priority
distributions  and  reasonable  charges  for  utilities  or  other  governmental
services supplied by the Tribe to the Authority,  the Authority may not make any
distributions  to the  Tribe  or its  members  at any  time  any  relinquishment
payments are outstanding.

     (2)  Affiliate  Transactions.  Except for payments of the minimum  priority
distributions  and  reasonable  charges  for  utilities  or  other  governmental
services  supplied by the Tribe to the Authority,  the Authority agrees to abide
by certain  restrictions on transactions with the Tribe and its members,  all as
set forth in the Relinquishment Agreement.

     (3)  Replacement/Restoration  of the  Mohegan  Sun.  If any  portion of the
Mohegan  Sun's  facilities is damaged by fire or other  casualty,  the Authority
shall replace or restore such facilities to substantially  the same condition as
prior to such casualty,  but only to the extent insurance proceeds are available
to do so. If sufficient insurance proceeds are not available, the Authority will
use  reasonable  efforts  to obtain  the  required  financing,  on  commercially
reasonable terms, to undertake and complete such replacement or restoration.

     (4) Business Purpose.  The Authority has agreed that during the term of the
Relinquishment  Agreement  it will only  engage in the casino  gaming and resort
business (and any incidental  business or activity) and will continue to operate
the Mohegan Sun as currently operated.

Under the  Relinquishment  Agreement,  the Authority and TCA agreed that it will
not solicit any employee of the other party or any  affiliate of the other party
for five years.

TCA has granted to the Authority an exclusive and perpetual license with respect
to trademarks and other similar  rights,  including the "Mohegan Sun" name, used
at or developed for the Mohegan Sun.

With certain  limitations set forth in the  Relinquishment  Agreement,  both the
Tribe and the Authority have waived immunity from  unconsented  suit for certain
enforcement rights of TCA arising under the Relinquishment Agreement.


                                        3

Development Agreement
---------------------

TCA and the Authority entered into a development  services agreement on February
7, 1998. Under this "Development  Agreement",  TCA agreed to oversee the design,
construction,  furnishing,  equipping  and  staffing  of the Project for a $14.0
million  development  fee (the  "Development  Fee"). On May 24, 2000 TCA and the
Authority  agreed  that TCA had  performed  and  completed  all its  obligations
relating to the staffing of the Project and that TCA has no further  obligations
relating  to the  staffing  of the  Project.  The  first  phase of the  Project,
including  the Casino of the Sky,  the Shops at Mohegan Sun and the  10,000-seat
Mohegan  Sun  Arena  opened  in  September  2001.  In  April  2002,  734  of the
1,200-hotel  rooms  in the  34-story  luxury  hotel as well as the  meeting  and
convention  space and spa opened.  The balance of the  1,200-hotel  rooms opened
during  June 2002.  At December  31,  2002 the  Project  had been  substantially
completed.

The Authority pays the  Development  Fee to TCA quarterly which began on January
15, 2000 until the Completion Date, as defined in the Development Agreement,  of
the Project  based on  incremental  completion of the Project as of each payment
date. A summary of the  quarterly  Development  Fee payments  received by TCA in
accordance with the terms of the Development Agreement is as follows:


           January 15, 2000                  $ 1,372,000
           April 20, 2000                        896,000
           July 17, 2000                       1,260,000
           October 13, 2000                    1,372,000
           January 23, 2001                      588,000
           April 16, 2001                      1,582,000
           July 20, 2001                       2,212,000
           October 17, 2001                    1,974,000
           January 25, 2002                    1,260,000
           April 22, 2002                        413,000
           July 19, 2002                         581,000
           October 18, 2002                      238,000
           January 24, 2003                       84,000
                                             -----------
                                             $13,832,000
                                             ===========

On February 9, 1998 the Development Services Agreement Phase II was entered into
between TCA and Kerzner International  Management Limited ("KIML").  Pursuant to
the Development  Services  Agreement Phase II, TCA  subcontracted  with KIML and
KIML  agreed  to  perform  those  services  assigned  to KIML by TCA in order to
facilitate  TCA's  fulfillment  of its duties and  obligations  to the Authority
under the Development Agreement. The Development Services Agreement Phase II was
subsequently  assigned  to  Kerzner  Investments.   TCA  shall  pay  to  Kerzner
Investments a fee, as subcontractor  (the  "Development  Services Fee Phase II")
equal to 3% of the development costs of the Project,  less all costs incurred by
TCA in connection with the Project.  The Development Services Fee Phase II shall
be paid in installments  due on December 31, 1999 and 2000 and on the Completion
Date, as defined in the Development  Agreement,  with a final payment being made
when the actual  development  costs of the Project  are known.  The fee is to be
paid from available cash flow of TCA, if any,  subordinate to certain other fees
as described below under the heading "Amended and Restated  Omnibus  Termination
Agreement".

KIML has further  subcontracted  with Wolman  Construction LLC  ("Construction")
(the  "Local  Construction  Services  Agreement")  to  provide  certain of those
services  assigned to KIML by TCA.  This  agreement was also assigned to Kerzner
Investments.  Kerzner  Investments shall pay 20.83% of the Development  Services
Fee  Phase  II as and  when  Kerzner  Investments  receives  payment  from  TCA.
Construction has subcontracted with The Slavik Company for 14.30% of its fee.

The  Development  Agreement  terminates  after the earlier of  completion of the
Project or 10 years.  In  addition,  each party has the right to  terminate  the
Development  Agreement  if there is a default or failure to perform by the other
party.  The  parties  must  submit  disputes  arising  under  the  agreement  to
arbitration  and have agreed that punitive  damages may not be awarded to either
party by any arbitrator.  The Authority has also waived  sovereign  immunity for
the purposes of permitting,  compelling or enforcing  arbitration and has agreed
to be sued by TCA in any court of  competent  jurisdiction  for the  purposes of
compelling  arbitration  or enforcing any  arbitration or judicial award arising
out of the Development Agreement.



Management Agreement
--------------------

The  Management  Agreement  between TCA and the Tribe was entered into on August
30, 1995. The Tribe had assigned its rights and obligations in this agreement to
the Authority. The Authority and TCA had consented to this assignment.

Until January 1, 2000,  TCA was the exclusive  manager of the Mohegan Sun. Under
the Management  Agreement,  the Tribe had granted to TCA the exclusive right and
obligation  to develop,  manage,  operate and  maintain  the Mohegan Sun and all
other  related   facilities   that  are  owned  by  the  Tribe  or  any  of  its
instrumentalities, including the Authority and to train members of the Tribe and
others in the management of the Mohegan Sun.

Until January 1, 2000 TCA's primary source of revenue was management  fees under
the Management  Agreement (the "Management Fees"). The Management Fees were paid
monthly (the final payment was received by TCA from the Authority on January 25,
2000) and were calculated in three tiers based upon Net Revenues,  as defined in
the Management Agreement, of the Mohegan Sun set forth below (in thousands):

                 I                   II               III
           ---------------   ------------------  -----------------
             40% of Net      Revenues in Tier I    Revenues in
           Revenues up to     plus  35% of Net   Tiers I & II plus
                              Revenues between      30% of Net
                                                  Revenues above
           ---------------   ------------------  -----------------

Year 1        $50,546         $50,547-$63,183        $63,183
Year 2        $73,115         $73,116-$91,394        $91,394
Year 3        $91,798         $91,799-$114,747       $114,747
Year 4        $95,693         $95,694-$119,616       $119,616



In addition, TCA was required to fund $1.2 million per year ($100,000 per month)
from its  Management  Fees  into a  capital  replacement  reserve.  The  capital
replacement reserve is the property of the Authority.


                                        4

Amended and Restated Omnibus Termination Agreement
--------------------------------------------------

Effective March 18, 1999, the Amended and Restated Omnibus Termination Agreement
(the "Amended and Restated Omnibus  Termination  Agreement") was entered into by
TCA, Kerzner International,  the Company, KIML, LMW, Kerzner Investments, Slavik
and  Construction;  which (i) terminated the memorandum of  understanding  dated
February 7, 1998; and (ii) effective  January 1, 2000  terminated a) the Amended
and Restated Omnibus Financing Agreement, b) completion guarantee and investment
banking and financing  arrangement  fee agreement  (the  "Financing  Arrangement
Agreement");  c) the management  services  agreement;  d) the organizational and
administrative services agreement; e) the marketing services agreement; and f) a
letter agreement relating to expenses dated October 19, 1996.

In consideration  for the termination of such agreements,  TCA will use its cash
to pay the following obligations in the priority set forth below:

     (a)  First,  to  pay all  unpaid  amounts  which  may  be due  under   the
          terminated  letter  agreement  and to pay  certain  affiliates  of the
          Company and to Kerzner  Investments  a percentage  of an annual fee of
          $2.0 million less the actual expenses incurred by TCA. Such annual fee
          shall be payable in equal quarterly  installments  beginning March 31,
          2000 and ending  December 31, 2014.  For the years ended  December 31,
          2002 and 2001, $0 and $1,712,791  ($856,396 to Kerzner Investments and
          $856,395 to affiliates of the  Company),  respectively,  had been paid
          and incurred by TCA in terms of the first priority.


     (b)  Second,  to return all capital  contributions  made by the partners of
          TCA after September 29, 1995. TCA anticipates  making capital calls to
          fund expenses  related to the  development  of the Project,  and these
          capital  calls will be  repaid,  based on cash  flow,  in the  quarter
          following the quarter in which the capital call was made. From January
          1, 2000 to December 31, 2002 these  capital  contributions  aggregated
          $7,100,000.  $6,700,000 has been repaid to the partners of TCA, 50% to
          the Company and 50% to Kerzner Investments.

          As of December 31, 2002,  $400,000 in capital  contributions  remained
          outstanding.  On January 28, 2003, a cash distribution of $200,000 was
          made to each partner.

     (c)  Third, to pay any accrued  amounts for obligations  performed prior to
          January  1,  2000  under  the  Financing  Arrangement  Agreement.  All
          required payments were made during 2000.

     (d)  Fourth,  to make the payments set forth in the agreements  relating to
          the Development Services Agreement Phase II and the Local Construction
          Services  Agreement.  No payments  are required or due at December 31,
          2002. The contingent obligation at December 31, 2002 was approximately
          $10,216,000.

     (e)  Fifth,  to pay  Kerzner  Investments  an  annual  fee of $5.0  million
          payable in equal  quarterly  installments  of $1.25 million  beginning
          March 31, 2000 and ending  December 31, 2006. For each the years ended
          December 31, 2002 and 2001, $5.0 million had been paid and incurred by
          TCA in terms of the fifth priority.

     (f)  Sixth,  to pay any accrued  amounts  for  obligations  performed  with
          respect  to periods  prior to  January  1, 2000  under the  management
          services  agreement,  the organizational  and administrative  services
          agreement and the  marketing  services  agreement.  For the year ended
          December 31, 2001, $23,621,754 ($11,810,877 to KIML and $11,810,877 to
          the  Company)  had been paid and incurred by TCA in terms of the sixth
          priority. The final required payments were made during 2001.

     (g)  Seventh,  for the period  beginning March 31, 2000 and ending December
          31,  2014,  to  pay  each  of  Kerzner  Investments  and  the  Company
          twenty-five  percent  (25%) of the  relinquishment  payments.  For the
          years ended December 31, 2002 and 2001,  $50,765,000  ($25,382,500  to
          Kerzner  Investments  and  $25,382,500 to the Company) and $19,457,160
          ($9,728,580  to Kerzner  Investments  and  $9,728,580 to the Company),
          respectively,  had  been  paid  and  incurred  by TCA in  terms of the
          seventh priority.  The contingent  obligation at December 31, 2002 was
          approximately $2,392,000.

     (h)  Eighth, to distribute all excess cash.

In addition,  TCA shall not make any  distributions  pursuant to the Amended and
Restated Omnibus Termination  Agreement until it has annually distributed to its
partners  pro rata,  the amounts  related to its  partners  tax  obligations  as
described in Section 3.03a(1) of the partnership agreement less twice the amount
of all other funds paid or  distributed to the Company during such year pursuant
to the Amended and Restated Omnibus Termination Agreement.

To the extent TCA does not have adequate  cash to make the payments  pursuant to
the Amended and Restated Omnibus Termination  Agreement,  such amounts due shall
be deferred without the accrual of interest until TCA has sufficient cash to pay
them.


                                        5

Amended and Restated Omnibus Financing Agreement
------------------------------------------------

Until January 1, 2000 TCA's primary source of revenue was Management Fees. Those
fees were utilized by TCA pursuant to the Amended and Restated Omnibus Financing
Agreement which was terminated effective January 1, 2000.

The Mohegan Tribal Gaming Authority
-----------------------------------

The Tribe is a federally recognized Indian tribe with an approximately  405-acre
reservation  located in  southeastern  Connecticut.  The Tribe  established  the
Authority  on July 15, 1995 with the  exclusive  power to conduct  and  regulate
gaming activities for the Tribe. Under the Indian Gaming Regulatory Act of 1988,
as amended ("IGRA"), federally recognized Indian tribes are permitted to conduct
full-scale  casino  gaming  operations on  tribal-land,  subject to, among other
things,  the negotiation of a tribal state compact with the affected state.  The
Tribe and the  State of  Connecticut  have  entered  into  such a  compact  (the
"Mohegan Compact") that has been approved by the U.S. Secretary of the Interior.
The Authority is governed by a management board (the "Management Board"),  which
consists of the nine members of the Tribal  Council (the  governing  body of the
Tribe).

Under  the  terms of the  Relinquishment  Agreement  on  December  31,  1999 the
Management  Agreement  terminated  and on  January  1,  2000 the  Tribe  assumed
day-to-day management of the Mohegan Sun.

The Tribe and the Authority have entered into a land lease ("Lease") pursuant to
which the Tribe is leasing to the Authority the land on which the Mohegan Sun is
located (the  "Site").  The Site is part of the Tribe's  approximately  405-acre
reservation  which was acquired and is held in trust for the Tribe by the United
States of America with the Tribe  retaining  perpetual  rights to the use of the
Site.



The Mohegan Sun
---------------

The Authority  owns and operates the Mohegan Sun, an  approximately  3.0 million
square foot  full-service  gaming and  entertainment  complex on a 240-acre site
overlooking  the  Thames  River  on  the  Tribe's  reservation  in  southeastern
Connecticut.  The  Mohegan  Sun is  located  approximately  one  mile  from  the
interchange  of  Interstate  395 and Route 2A in  Uncasville,  Connecticut.  The
Authority  constructed a four-lane  access road and  entrance/exit  ramps off of
Route 2A,  providing  guests direct access to Interstate  395 and Interstate 95,
the main highways  connecting Boston,  Providence and New York City. The Mohegan
Sun opened in October 1996 and recently the  Authority  substantially  completed
the Project.  The Mohegan Sun is one of two legally authorized gaming operations
in New England offering both traditional slot machines and table games.



The full-service gaming and entertainment complex includes the following:

Casino of the Earth. The Casino of the Earth, the original casino at the Mohegan
Sun,  has  approximately   176,500  square  feet  of  gaming  space  and  offers
approximately  3,640  slot  machines,  170  table  games  (including  blackjack,
roulette,  craps and baccarat) and 36 poker tables. Food and beverage amenities,
include three  full-service  themed fine dining  restaurants  with a fourth area
featuring  cuisine from all three themes,  a 610-seat  buffet,  a New York style
delicatessen,  a  24-hour  coffee  shop,  a  ten-station  food  court  featuring
international  and  domestic  cuisine and  multiple  service bars for a total of
approximately  1,800  restaurant  seats.  An  approximately  10,000 square foot,
440-seat  lounge  features  live  entertainment  seven days a week.  There is an
approximately   9,000  square  foot   simulcasting   race  book   facility,   an
approximately  3,000  square  foot,  50-seat  Keno lounge and three retail shops
providing  shopping  opportunities  ranging from  Mohegan Sun logo  souvenirs to
clothing to cigars.

Casino of the Sky. The Casino of the Sky has  approximately  119,000 square feet
of gaming space and offers  approximately  2,560 slot machine and 90 table games
(including  blackjack,   roulette,  craps  and  baccarat).   Food  and  beverage
amenities,  include two full-service restaurants, two quick-service restaurants,
a 24-hour coffee shop with room service,  a 350-seat  buffet, a six station food
court  featuring  international  and domestic  cuisine and five lounges and bars
operated  by  the  Mohegan  Sun,  as  well  as  four   full-service   and  three
quick-service restaurants and one lounge operated by third-parties,  for a total
of approximately  2,200 restaurant seats, the Mohegan Sun Arena with seating for
up to 10,000,  a 300-seat  cabaret,  a child care  facility and an  arcade-style
recreation area, The Shops at Mohegan Sun containing  approximately 30 different
retail  shops,  six of  which  are  owned  by the  Authority,  an  approximately
1,200-room  luxury  hotel,  a 20,000 square foot spa and  approximately  100,000
square feet of convention space.

As of  September  30,  2002,  Mohegan Sun had parking  spaces for  approximately
13,000  guests and 3,100  employees.  In  addition,  the  Authority  operates an
approximately 4,000 square foot, 20-pump gasoline station and convenience center
located adjacent to the Mohegan Sun.

The information  concerning Kerzner  International,  the Tribe and the Authority
has been derived from publicly filed information.


Internet Address
----------------

The Company's internet address is http://www.waterfordgroup.net. In light of the
limited  trading  market for the  Company's  securities,  the  Company  does not
currently make its periodic and current reports  available,  free of charge,  on
its website. The Company's periodic and current reports are available,  however,
free of charge, on the Commission's  website,  at www.sec.gov.  The Company will
provide electronic or paper copies of its filings free of charge upon request.


                                        6


Item 2.   PROPERTIES

The Company does not have an interest in real property.

Item 3.   LEGAL PROCEEDINGS

On January 6, 1998, Leisure Resort Technology,  Inc.  ("Leisure") and defendants
Waterford Gaming,  L.L.C., Trading Cove Associates,  LMW Investments,  Inc., and
Slavik Suites,  Inc.  settled a prior lawsuit brought by Leisure.  In connection
with this  settlement,  Leisure and Trading Cove Associates,  Waterford  Gaming,
L.L.C., LMW Investments,  Inc. and Slavik Suites, Inc. entered into a settlement
and release  agreement.  Pursuant  to this  settlement  and  release  agreement,
Waterford Gaming,  L.L.C.  bought out Leisure's  beneficial  interest in Trading
Cove Associates.

By complaint dated January 7, 2000, as amended February 4, 2000, Leisure filed a
four count complaint naming as defendants Waterford Gaming, L.L.C., Trading Cove
Associates, LMW Investments, Inc., Slavik Suites, Inc., Waterford Group, L.L.C.,
Len Wolman and Mark Wolman (collectively, the "Defendants"). The matter has been
transferred  to the  complex  litigation  docket and is  pending  in  Waterbury,
Connecticut.  The  complaint  alleged  breach of  fiduciary  duties,  fraudulent
non-disclosure,  violation of Connecticut Statutes Section 42-110a, et seq., and
unjust  enrichment  in  connection  with  the  negotiation  by  certain  of  the
Defendants of the settlement and release agreement. The complaint also brought a
claim for an accounting.  The complaint  seeks  unspecified  legal and equitable
damages. On February 29, 2000,  Defendants filed a Motion to Strike and a Motion
for  Summary  Judgement,  each with  respect to all  claims.  The Court  granted
Defendants'  Motion to Strike in part and denied  Defendants' Motion for Summary
Judgement,  on October 13, 2000.  The Court's  order  dismissed the claim for an
accounting and the claim under Connecticut Statutes Section 42-110a, et seq. The
Court  also  struck  the alter ego  allegations  in the  complaint  against  LMW
Investments,  Inc.,  Slavik  Suites,  Inc.,  Len  Wolman and Mark  Wolman.  In a
decision  dated  August 6, 2001,  the Court  dismissed  all claims  against  LMW
Investments, Inc., Slavik Suites, Inc., Len Wolman and Mark Wolman.

On November 15, 2000, the Company and its co-defendants  answered the complaint.
In addition,  the Company and Trading Cove Associates asserted counterclaims for
breach of the  settlement  and  release  agreement  and  breach  of the  implied
covenant  of good faith  against  Leisure  and its  president,  Lee Tyrol.  In a
decision dated June 6, 2001, the Court dismissed the  counterclaims  against Lee
Tyrol.  Leisure  has  moved  for  summary  judgement  seeking  dismissal  of the
counterclaims in full. This motion for summary judgement is pending.

Discovery  has  commenced.   Pursuant  to  the  current  scheduling  order,  all
depositions are to be completed by June 30, 2003. A trial date has not been set.

The Company believes that it has meritorious  defenses and intends to vigorously
contest the claims in this action and to assert all available  defenses.  At the
present time,  the Company is unable to express an opinion on the  likelihood of
an  unfavorable  outcome  or to give an  estimate  of the  amount  or  range  of
potential loss to the Company as a result of this litigation due to the disputed
issues of law and/or facts on which the outcome of this  litigation  depends and
due to the infancy of both the action and discovery in the action.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to the Company's  security  holders for a vote for the
fiscal year ended December 31, 2002.



                                        7


                                     PART II

Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS
          MATTERS

Not applicable.

Item 6.   SELECTED FINANCIAL DATA

<TABLE>
                                    For the Year Ended
                                    ------------------

<S>                            <C>                  <C>                  <C>                  <C>              <C>

                                    2002                 2001                 2000                 1999                 1998
                               --------------       --------------       --------------       --------------       --------------


OPERATING RESULTS
  Organizational and
   administrative fee income-
     Trading Cove Associates    $     ---            $  11,810,877        $  11,649,600        $  14,252,209        $   4,231,768
  25% of relinquishment
   payments-Trading Cove
     Associates                   25,382,500             9,728,580              ---                  ---                  ---
  Interest and dividend
   income                            534,012             1,330,711            1,894,738            6,144,502            4,873,323
  Subordinated notes fee
   income-Trading Cove
     Associates                       ---                  ---                  692,782            3,731,806            3,229,253
  Completion guarantee notes
   fee income-Trading Cove
     Associates                       ---                  ---                  215,625              903,438              467,500
  Management services income-
   Trading Cove Associates            ---                  ---                  ---                1,664,699            3,584,313
                               --------------       --------------       --------------       --------------       --------------
  Total revenue                    25,916,512           22,870,168           14,452,745           26,696,654           16,386,157
                               --------------       --------------       --------------       --------------       --------------

  Total expenses                  (13,102,082)         (13,579,600)         (13,490,367)         (24,789,253)          (9,576,278)

  Equity in income (loss)
   of Trading Cove Associates         218,880           (2,715,996)            (574,002)           6,115,300             (482,869)
                               --------------       --------------       --------------       --------------       --------------
  Net income                    $  13,033,310        $   6,574,572        $     388,376        $   8,022,701        $   6,327,010
                               ==============       ==============       ==============       ==============       ==============
OTHER DATA:
  Interest expense              $  11,080,139        $  11,560,994        $  11,641,049        $  19,045,076        $   7,837,552
  Net cash used in
   operating activities               ---                  ---                1,556,537              ---                  ---
  Net cash provided by
   operating activities            10,639,911            5,394,941              ---               21,753,116            2,561,515
  Net cash used in
   investing activities               ---                  ---               14,557,877              ---                  ---
  Net cash provided by
   investing activities            16,395,304              148,647              ---               18,920,350            1,020,625
  Net cash used in
   financing activities            25,947,562            5,996,660           40,199,182              ---                1,031,555
  Net cash provided by
   financing activities               ---                  ---                  ---               16,880,807              ---

YEAR-END STATUS:
  Total current assets          $  26,032,197        $  38,127,059        $  34,708,598        $  72,724,437        $   6,459,361
  Trading Cove Associates -
   equity investment                5,447,338            5,778,458            7,944,454            9,041,568            8,662,198
  Beneficial interest-Leisure
   Resort Technology, Inc.          4,540,039            4,918,029            5,296,019            5,674,009            4,191,909
  Investment in 15%
   subordinated notes
    receivable                         ---                 ---                  ---                  ---               32,059,517
  Investment in completion
   guarantee subordinated
    notes receivable                   ---                 ---                  ---                  ---                5,075,000
  Deferred financing costs net
   of accumulated amortization      2,643,338            3,010,202            3,377,066            3,781,051            3,339,780
  Fixed assets net of
   accumulated depreciation            11,696               22,476               33,256               44,036              ---
                               --------------       --------------       --------------       --------------       --------------
  Total assets                  $  38,674,608        $  51,856,224        $  51,359,393        $  91,265,101        $  59,787,765
                               ==============       ==============       ==============       ==============       ==============

  Total current liabilities     $   3,133,192        $   3,400,556        $   3,481,637        $   3,576,539        $   1,037,887
  12-3/4% senior notes
   payable                           ---                   ---                  ---                  ---               61,471,000
  9-1/2% senior notes
   payable                        108,007,000          115,434,000          119,691,000          122,159,000              ---
                               --------------       --------------       --------------       --------------       --------------
  Total liabilities             $ 111,140,192        $ 118,834,556        $ 123,172,637        $ 125,735,539        $  62,508,887
                               ==============       ==============       ==============       ==============       ==============

</TABLE>

                                        8



Item 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


Certain Risk Factors
--------------------

Lack of Operations; Dependence on the Mohegan Sun

The Company does not conduct any business  operations  other than in  connection
with its role as a managing general partner of TCA and activities  incidental to
the issuance of the $125 Million  Senior Notes and the making of restricted  and
temporary  investments.  The Company is prohibited by the terms of the Indenture
from engaging in any other business activities.  The Company intends to fund its
operating, debt service and capital needs primarily from cash flows from TCA and
from  cash  flows   (dividend  and  interest)  from   restricted  and  temporary
investments.

TCA has two current sources of revenue and cash flows,  Relinquishment  Fees and
Development Fee. There can be no assurance that the Mohegan Sun will continue to
generate  sufficient  revenues for the  Authority to be profitable or to service
its debt  obligations,  or to pay  Relinquishment  Fees and Development Fee. The
Company is entirely  dependent upon the performance of the Mohegan Sun, which is
subject to matters  over which TCA and the  Company  have no control  including,
without  limitation,   general  economic  conditions,  effects  of  competition,
political,  regulatory  and  other  factors,  and the  actual  number  of gaming
customers and the amount wagered.

Although  TCA  is  entitled  to  a  $14.0  million  Development  Fee  under  the
Development   Agreement,   it  has  entered  into  a  subcontract  with  Kerzner
Investments  who has  subcontracted  with  affiliates  of the Company to provide
certain  of  the  services  required  by  such  agreement  and  is to  pay  such
subcontractors  a Development  Services Fee Phase II and incur expenses equal to
3% of the total cost of the  Project.  On October 13, 2000 the Tribe  approved a
$160 million increase to the original budget (excluding capitalized interest) of
$800 million for the  Project.  In a press  release  dated May 5, 2002 the Tribe
indicated  that the cost of  completing  the  Project  is  estimated  to be $1.0
billion  (excluding  capitalized  interest) which  represents an increase of $40
million  over the  previous  estimate  of $960  million.  Based  upon the latest
estimated cost of completing the Project of $1.0 billion (excluding  capitalized
interest) such Development Services Fee Phase II and expenses are expected to be
approximately  $30  million.  Such  Development  Services  Fee  Phase II is only
payable to the extent of available cash flow. Thus,  ultimately TCA may pay more
in Development  Services Fee Phase II to its subcontractors and expenses than it
will receive under the  Development  Agreement.  If the total estimated costs of
the Project of $1 billion (excluding  capitalized  interest) increase,  then the
total  Development  Services Fee Phase II and expenses paid by TCA will increase
proportionately, which reduces the cash flow distributable to the Company.

While the Company expects its future  operating cash flows will be sufficient to
cover its  expenses,  including  interest  costs,  the  Company  cannot give any
assurance that it will be able to do so.

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  in the United States of America  requires  management to
make estimates and assumptions  that affect the amounts of assets and liablities
at the date of the  financial  statements,  as well as the  reported  amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

The notes to the  Company's  financial  statements  included in Item 8 contain a
summary of significant  accounting  policies and methods used in the preparation
of the Company's  financial  statements.  However, in the opinion of management,
the Company does not have any individual  accounting  policy that is critical in
the  preparation  of its  financial  statements.  This is due to the  definitive
nature of the business in which the Company is engaged. Also, in many cases, the
Company must use an accounting policy or method because it is the only policy or
method permitted under accounting  principles  generally  accepted in the United
States of America. The following is a review of the more significant  accounting
policies and methods used by the Company:

     Revenue  Recognition - The Company  receives revenue from TCA in accordance
     with an Amended and Restated Omnibus Termination  Agreement.  The amount of
     revenues  earned  relies  upon  the  fees  earned  by TCA  pursuant  to its
     Relinquishment  Agreement and the Development Agreement with the Authority.
     Revenues are accrued when determinable and payment is assured.

     Concentration  of  Credit  Risk - The  Company  has one  primary  source of
     revenue:  payments from TCA. The Company  anticipates regular payments from
     TCA based upon the  operating  results  of the  Authority  and the  related
     Relinquishment Fees, as defined, and Development Fee, as defined,  paid and
     to be paid by the Authority.

     Equity  Investments - The Trading Cove Associates,  equity  investment,  is
     accounted for utilizing the equity  method.  Included in the  investment is
     the purchase  price paid to a corporation  for their 12.5% interest in TCA.
     This amount is amortized over the terms of the related agreement.


Overview of Current and Future Cash Flows
-----------------------------------------

The Company  expects to fund its operating,  debt service and capital needs from
cash flows from the Company's share of payments from TCA, and from the Company's
available  cash.  Based  upon  the  Company's   anticipated  future  operations,
management  believes  that  available  cash flow will be  sufficient to meet the
Company's  anticipated  requirements  for  future  operating  expenses,   future
scheduled  payments of principal  and interest on the $125 Million  Senior Notes
and additional  investments  in TCA that may be required in connection  with the
Project. No assurance,  however,  can be given that the operating cash flow will
be sufficient for that purpose.

The following discussion should be read in conjunction with, and is qualified in
its  entirety  by, the  Company's  financial  statements  and the notes  thereto
included elsewhere herein.


Table of Contractual Obligations
--------------------------------

The following table provides an overview of the Company's aggregate contractual
obligations as of the latest fiscal year end balance sheet date.

<TABLE>

Contractual Obligations                               Payments due by period
-----------------------                               ----------------------

<C>                     <S>             <S>             <S>             <S>             <S>
                                Total        Less than       1-3 years       3-5 years       More than
                                              1 year                                          5 years
                                -----        ---------       ---------       ---------       ---------

Long-Term Debt
  Obligations (1)                (1)            (1)             (1)             (1)             (1)
Capital Lease
  Obligations                     0              0               0               0               0
Operating Lease
  Obligations                     0              0               0               0               0
Purchase Obligations              0              0               0               0               0
Other Long-Term
  Liabilities on the
   Registrant's Balance
    Sheet under
     GAAP                         0              0               0               0               0
                                -----        ---------       ---------       ---------       ---------
Total                            (1)            (1)             (1)             (1)             (1)
                                =====        =========       =========       =========       =========

</TABLE>

(1) The Company's  long-term debt consists of obligations under its $125 Million
Senior Notes.  $108,007,000 in aggregate principal amount of $125 Million Senior
Notes is currently outstanding.  Interest on the outstanding principal amount of
$125 Million Senior Notes is payable by the Company  semi-annually in arrears on
March 15 and September 15 at a rate of 9.5% per annum. The outstanding  pricipal
amount of $125  Million  Senior  Notes is due and  payable  in full on March 15,
2010.  In addition to making  payments of principal  and interest as decribed in
the preceding sentences,  on March 15 and September 15 of each year, the Company
and Finance must redeem their $125 Million Senior Notes with any "Company Excess
Cash" (as defined in the indenture governing the $125 Million Senior Notes) at a
redemption  price  expressed as a percentage  of the  principal  amount of notes
being  redeemed.  Such  redemption  price  declines  annually  from  109.5%  for
redemptions  made  between  March  15,  1999  and May  14,  2000,  to  100%  for
redemptions  made after March 14, 2010. Any reduction in pricipal  amount of the
$125  Million  Senior  Notes with  Company  Excess Cash will lower the  interest
payments payable by the Company in subsequent periods.


Sources of Revenues
-------------------

The Company has one primary source of revenue and cash flow:  payments from TCA.
The Company  anticipates  regular  payments from TCA based on the results of the
Mohegan  Sun  and  Relinquishment  Fees  and  Development  Fee  payments  by the
Authority.


Distributions on the Company's partnership interest in TCA
----------------------------------------------------------

For the years ended December 31, 2002 and 2001, the Company received $15,161,000
and  $13,781,853  from TCA in accordance  with the Amended and Restated  Omnibus
Termination   Agreement.   TCA  earned   Relinquishment  Fees  of  approximately
$58,509,000  and  approximately  $45,715,000  in each of the years  then  ended,
respectively,  pursuant to the Relinquishment Agreement. In addition, TCA earned
Development  Fees of $1,316,000 and  $7,028,000,  respectively,  during the same
period. At December 31, 2002 and 2001, respectively,  $11,021,500 and $8,357,604
was due from TCA.


                                        9


Results of Operations
---------------------

Comparison of Operating Results for the Years Ended
---------------------------------------------------
December 31, 2002 and 2001
--------------------------

Total  revenue for the twelve  months ended  December  31, 2002 was  $25,916,512
compared with  $22,870,168  for the twelve months ended December 31, 2001.  This
increase was  primarily  attributable  to an increase in Revenues of the Mohegan
Sun which resulted in greater  Relinquishment Fees payments to TCA and offset by
a decrease  in  Development  Fee  payments  to TCA and by the timing of payments
pursuant to the Amended  and  Restated  Omnibus  Termination  Agreement.  25% of
relinquishment  payments - Trading Cove Associates,  as detailed under point (g)
of the table set forth above under  "Amended  and Restated  Omnibus  Termination
Agreement"  increased by $15,653,920 and  organizational  and administrative fee
income - Trading Cove  Associates,  as detailed under point (f) of the table set
forth above under "Amended and Restated Omnibus Termination Agreement" decreased
by $11,810,877. In addition, interest and dividend income decreased by $796,699.

Total  expenses for the twelve  months ended  December 31, 2002 was  $13,102,082
compared  with  $13,579,600  for the twelve  months  ended  December  31,  2001.
Interest  expense  decreased by $480,855 due primarily to the  redemption of the
$125 Million senior notes in the principal  amounts of $4,031,000 and $3,396,000
on March 15,  2002 and  September  15,  2002,  respectively,  salaries - related
parties increased by $127,933 due to the increase in Revenues of the Mohegan Sun
and  general  and   administrative   costs  decreased  by  $124,596   (primarily
attributable to a decrease in legal and other expenses related to the defense of
the  Leisure  litigation,  as detailed  under Part I: Item 3 Legal  Proceedings,
totaling  approximately  $156,000 and offset by an increase in insurance expense
of  approximately   $17,600,   by  an  increase  in  miscellaneous   expense  of
approximately  $6,400 and by an increase  in  accounting  fees of  approximately
$8,300).

Equity in income (loss) of Trading Cove  Associates  for the year ended December
31, 2002 was $218,880 compared with $(2,715,996) for the year ended December 31,
2001. The Company has included  amortization of purchased  interests of $440,028
in each  year's  equity  income(loss).  The  Company's  share of  TCA's  results
fluctuates  based  upon  revenues  received  by  TCA  under  the  Relinquishment
Agreement  and  payments  made by TCA under the  Amended  and  Restated  Omnibus
Termination   Agreement.   Accordingly,   the  Company's   share  of  TCA's  net
income(loss) was $658,900 and $(2,275,968) for the years ended December 31, 2002
and 2001, respectively.

As a result of the  foregoing  factors  the  company  experienced  net income of
$13,033,310  for the twelve  months ended  December 31, 2002  compared  with net
income of $6,574,572 for the twelve months ended December 31, 2001.


Comparison of Operating Results for the Years Ended
---------------------------------------------------
December 31, 2001 and 2000
--------------------------

Total  revenue for the twelve  months ended  December  31, 2001 was  $22,870,168
compared with  $14,452,745  for the twelve months ended December 31, 2000.  This
increase was  primarily  attributable  to an increase in Revenues of the Mohegan
Sun which  resulted  in  greater  Relinquishment  Fees  payments  to TCA,  by an
increase  in  Development  Fee  payments  to TCA and by the  timing of  payments
pursuant  to  the   Amended  and   Restated   Omnibus   Termination   Agreement.
Organizational  and  administrative  fee income - Trading  Cove  Associates,  as
detailed  under  point  (f) of the  table set forth  above  under  "Amended  and
Restated  Omnibus  Termination   Agreement"   increased  by  $161,277,   25%  of
relinquishment  payments - Trading Cove Associates,  as detailed under point (g)
of the table set forth above under  "Amended  and Restated  Omnibus  Termination
Agreement" increased by $9,728,580, subordinated notes fee income - Trading Cove
Associates and completion  guarantee notes fee income - Trading Cove Associates,
as detailed  under point (c) of the table set forth  above  under  "Amended  and
Restated  Omnibus  Termination  Agreement",  decreased by $692,782 and $215,625,
respectively. In addition, interest and dividend income decreased by $564,027.

Total  expenses for the twelve  months ended  December 31, 2001 was  $13,579,600
compared  with  $13,490,367  for the twelve  months  ended  December  31,  2000.
Interest  expense  decreased by $80,055 due  primarily to the  redemption of the
$125 Million Senior Notes in the principal amounts of $452,000 and $3,805,000 on
March 15, 2001 and September 15, 2001, respectively,  salaries - related parties
increased  by $47,116  due to the  increase  in  Revenues of the Mohegan Sun and
general and administrative costs increased by $29,293 (primarily attributable to
an  increase in bank sweep fees of  approximately  $15,800 and by an increase in
rating  services  expense of  approximately  $19,600 and offset by a decrease in
insurance  expense of approximately  $2,500 and by a decrease in legal and other
expenses  related to the defense of the Leisure  litigation,  as detailed  under
Part I: Item 3 Legal Proceedings, totaling approximately $3,000). In addition at
December  31, 1999  12-3/4%  senior  notes  tender  expense was over  accrued by
$90,000.

Equity in loss of Trading Cove  Associates  for the year ended December 31, 2001
was $2,715,996  compared with $574,002 for the year ended December 31, 2000 as a
result of the increase in the loss from Trading Cove Associates of approximately
$2,142,000  due  to  payments  pursuant  to the  Amended  and  Restated  Omnibus
Termination Agreement exceeding revenues during the period.

As a result of the  foregoing  factors  the  Company  experienced  net income of
$6,574,572  for the twelve  months  ended  December 31, 2001  compared  with net
income of $388,376 for the twelve months ended December 31, 2000.



                                       10


Liquidity and Capital Resources
-------------------------------

The initial capital of the Company consists of the partnership  interests in TCA
contributed  by Slavik and LMW in forming the Company.  In  connection  with the
offering of the $65 Million Senior Notes, the Company used  approximately  $25.1
million to purchase from Kerzner International $19.2 million in principal amount
of  Authority   subordinated   notes  plus  accrued  and  unpaid   interest  and
subordinated  notes fee amounts.  In  addition,  TCA  distributed  approximately
$850,000 in  principal  amount of Authority  subordinated  notes to the Company.
During  September 1997 and on October 12, 1998 and 1999,  the Company  purchased
from  Kerzner  International  $2.5  million  Authority  subordinated  notes plus
accrued and unpaid  interest and  completion  guarantee fee amounts  (total cost
approximately $2.8 million for each transaction).

On January 6, 1998 the Company paid  $5,000,000 to Leisure  whereby Leisure gave
up its beneficial  interest in 5% of the  organizational  and administrative fee
and excess cash of TCA and any other claims it may have had against the Company,
TCA and TCA's partners and former partner.

In connection  with the offering of the $125 Million  Senior Notes,  the Company
used  approximately  $72 million to  repurchase  its $65 Million  Senior  Notes,
distributed  approximately  $37 million to its new parent,  Waterford  Group and
paid the final $2 million to Leisure.

On  December  30,  1999,  the  Authority  paid to the  holders of the  Authority
subordinated  notes,  an amount to satisfy  all  obligations  of such  Authority
subordinated notes. The Company received $44,403,517 from the Authority.

On December 30, 1999, TCA distributed  $10,536,543 to its partners.  The Company
received $5,268,272.

On  January  4,  2000 in  accordance  with the  terms of the  Indenture  and the
Security  and Control  Agreement  dated as of March 17, 1999 between the Company
and Finance and State Street Bank and Trust Company, $15,000,000 was transferred
to restricted investments ("Interest Reserve Account").

On  January  4, 2000 also in  accordance  with the terms of the  Indenture,  the
Company distributed $34,671,789 to its sole member Waterford Group.

During 1999 and 2000,  on January 11, 2001, on April 12, 2001, on June 11, 2001,
on December 19, 2001,  on January 11, 2002,  on June 10, 2002,  on September 10,
2002,  on December  26, 2002 and on January 13,  2003,  the Company  distributed
$886,285,  $3,059,393,  $339,356,  $30,104,  $1,206,200,  $164,000,  $1,416,900,
$1,925,862,  $27,300, $150,500 and $1,290,900,  respectively, to Waterford Group
as tax distributions, in accordance with the terms of the Indenture.

On November 1, 2002 the Company distributed $15,000,000 to Waterford Group, as a
Permitted Dividend, in accordance with the terms of the Indenture.

Accordingly,  after taking into  consideration net income(loss) since inception,
the Company has a members' deficit of approximately  $72,500,000 and $67,000,000
at December 31, 2002 and 2001, respectively.

For the twelve  months ended  December 31, 2002 and 2001,  net cash  provided by
operating  activities (as shown in the Statements of Cash Flows) was $10,639,911
and $5,394,941 respectively.

Current assets decreased from $38,127,059 at December 31, 2001 to $26,032,197 at
December 31, 2002.  The decrease  was caused  primarily by the  distribution  to
Waterford  Group on  November  1,  2002,  in the amount of  $15,000,000,  by the
scheduled  semi-annual  payment of interest on March 15, 2002 and  September 15,
2002 on the $125 Million Senior Notes in the amounts of approximately $5,483,000
and $5,292,000,  respectively, by the redemption on March 15, 2002 and September
15, 2002 of $125 Million Senior Notes in the principal amounts of $4,031,000 and
$3,396,000,  respectively,  and  offset  by  approximately  $10,640,000  of cash
provided by operations and by the  distributions  by TCA in terms of the Amended
and Restated Omnibus Termination Agreement

Current liabilities decreased from $3,400,556 at December 31, 2001 to $3,133,192
at December 31, 2002. The decrease was primarily  attributable  to a decrease in
accrued interest on senior notes payable of approximately $208,000 (attributable
to the  redemption  on March 15, 2002 and  September  15,  2002 of $125  Million
Senior  Notes  in  the   principal   amounts  of  $4,031,000   and   $3,396,000,
respectively)  and by a decrease in accrued  expenses  and  accounts  payable of
approximately  $59,600  (primarily  attributable to a decrease in the amount due
for legal and other expenses  related to the defense of the Leisure  litigation,
as detailed under Part I: Item 3 Legal Proceedings, of approximately $67,500, by
a decrease in the amount due for accounting services of approximately $2,000, by
a decrease in the amount due for miscellaneous  expenses of approximately $2,300
and offset by an  increase  in the amount  due for  salaries-related  parties of
approximately  $5,000  and by an  increase  in the  amount  due for other  legal
expenses of approximately $7,000).

For the years ended  December  31, 2002 and 2001 net cash  provided by investing
activities  (as  shown in the  statement  of cash  flows)  was  $16,395,304  and
$148,647,  respectively.  The net cash provided by investing  activities in 2002
was primarily the result of sales and (purchases) of restricted  investments-net
of approximately $15,845,000, distributions from TCA of $1,550,000 and offset by
contributions  to TCA of  $1,000,000  (to  fund  certain  of  TCA's  development
expenses  in  connection  with the  Project at the  Mohegan  Sun).  The net cash
provided by investing  activities  in 2001 was primarily the result of sales and
(purchases)   of   restricted   investments-net   of   approximately   $699,000,
distributions  from  TCA of  $800,000  and  offset  by  contributions  to TCA of
$1,350,000 (to fund certain of TCA's development expenses in connection with the
Project at the Mohegan Sun).


                                       11

The Company anticipates that up to $550,000 in additional contributions may have
to be made by the Company to TCA (to fund certain of TCA's development  expenses
in  connection  with the project at the Mohegan  Sun).  As of December  31, 2002
$4,550,000  had been  contributed by the Company to TCA to fund certain of TCA's
development expenses in connection with the Project at the Mohegan Sun.

For the  twelve  months  ended  December  31,  2002 and  2001,  net cash used in
financing  activities (as shown in the Statements of Cash Flows) was $25,947,562
and $5,996,660,  respectively. The net cash used in financing activities in 2002
was primarily the result of the  redemption of the $125 Million  Senior Notes in
the  principal  amounts  of  $4,031,000  and  $3,396,000  on March 15,  2002 and
September 15, 2002,  respectively,  and by  distributions  to the Company's sole
member  Waterford  Group of  approximately  $18,521,000.  The net  cash  used in
financing  activities in 2001 was primarily the result of the  redemption of the
$125 Million Senior Notes in the principal amounts of $452,000 and $3,805,000 on
March 15, 2001 and September 15, 2001,  respectively,  and tax  distributions to
the Company's sole member Waterford Group of approximately $1,740,000.

The Company and Finance are required to make a mandatory redemption on September
15 and March 15, of each year,  which began  September 15, 1999, of $125 Million
Senior Notes using Company Excess Cash, as defined in the  Indenture,  which the
Company  and Finance may have as of the  preceding  August 1 and  February 1. On
August 1, 1999 the Company and Finance  had  Company  Excess  Cash,  as defined,
available for mandatory  redemption  of the $125 Million  Senior Notes  totaling
approximately $8,983,000,  and accordingly on September 15, 1999 the Company and
Finance  made a  mandatory  redemption  of  $125  Million  Senior  Notes  in the
principal amount of $2,841,000 at the redemption  price of 109.50%.  On February
1, 2000 the Company and Finance had Company  Excess Cash, as defined,  available
for mandatory redemption of the $125 Million Senior Notes totaling approximately
$8,276,000,  and  accordingly  on March 15, 2000 the Company and Finance  made a
mandatory  redemption of $125 Million  Senior Notes in the  principal  amount of
$2,277,000 at the  redemption  price of 108.636%.  On August 1, 2000 the Company
and  Finance had Company  Excess  Cash,  as  defined,  available  for  mandatory
redemption of the $125 Million Senior Notes, totaling approximately  $5,902,000,
and  accordingly  on September 15, 2000 the Company and Finance made a mandatory
redemption of $125 Million  Senior Notes in the principal  amount of $191,000 at
the  redemption  price of 108.636%.  On February 1, 2001 the Company and Finance
had Company Excess Cash, as defined,  available for mandatory  redemption of the
$125 Million Senior Notes totaling  approximately  $6,173,000 and accordingly on
March 15, 2001 the Company and Finance made a mandatory  redemption  of the $125
Million Senior Notes in the principal amount of $452,000 at the redemption price
of 107.773%.  On August 1, 2001 the Company and Finance had Company Excess Cash,
as defined,  available for mandatory redemption of the $125 Million Senior Notes
totaling  approximately  $9,765,000,  and  accordingly on September 15, 2001 the
Company and Finance made a mandatory redemption of the $125 Million Senior Notes
in the principal  amount of $3,805,000 at the redemption  price of 107.773%.  On
February 1, 2002 the Company and Finance had Company  Excess  Cash,  as defined,
available for mandatory  redemption  of the $125 Million  Senior Notes  totaling
approximately  $9,793,000,  and  accordingly  on March 15,  2002 the Company and
Finance  made a mandatory  redemption  of the $125  Million  Senior Notes in the
principal amount of $4,031,000,  at the redemption price of 106.909%.  On August
1, 2002 the Company and Finance had Company  Excess Cash, as defined,  available
for mandatory redemption of the $125 Million Senior Notes totaling approximately
$8,923,000 and  accordingly on September 15, 2002 the Company and Finance made a
mandatory redemption of the $125 Million Senior Notes in the principal amount of
$3,396,000, at the redemption price of 106.909%. On February 1, 2003 the Company
and  Finance had Company  Excess  Cash,  as  defined,  available  for  mandatory
redemption of the $125 Million Senior Notes totaling  approximately  $11,131,000
and  accordingly  on March 15, 2003 the  Company  and  Finance  made a mandatory
redemption  of the  $125  Million  Senior  Notes  in  the  principal  amount  of
$5,658,000 at the redemption price of $106.045%.

The Company  expects to fund its operating,  debt service and capital needs from
cash flows from the Company's share of payments from TCA, and from the Company's
available  cash.  Based  upon  the  Company's   anticipated  future  operations,
management  believes  that  available  cash flow will be  sufficient to meet the
Company's  anticipated  requirements  for  future  operating  expenses,   future
scheduled  payments of principal  and interest on the $125 Million  Senior Notes
and additional  investments  in TCA that may be required in connection  with the
Project  at the  Mohegan  Sun.  No  assurance,  however,  can be given  that the
operating cash flow will be sufficient for that purpose.


                                       12


Item 7a.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk  represents the risk of changes in value of a financial  instrument,
derivative or non-derivative,  caused by fluctuations in interest rates, foreign
exchange  rates  and  equity  prices.  Changes  in  these  factors  could  cause
fluctuations in earnings and cash flows.

For fixed rate debt,  changes in interest rates generally affect the fair market
value  of the  debt  instrument,  but not  earnings  or cash  flows.  Therefore,
interest  rate risk and  changes  in the fair  market  value of fixed  rate debt
should not have a  significant  impact on earnings or cash flows until such debt
is refinanced,  if necessary.  For variable rate debt, changes in interest rates
generally  do not impact the fair market  value of the debt  instrument,  but do
affect  future  earnings  and cash flows.  The Company did not have any variable
rate debt  outstanding  at December 31, 2002 and 2001.  The fair market value of
the  Company's  long-term  debt at December 31, 2002 and 2001 is estimated to be
approximately $111,787,000 and $118,897,000,  respectively,  based on the quoted
market price for the same issue.

The Company is exposed to market risks from  fluctuations  in interest rates and
the  effects  of those  fluctuations  on  market  values of the  Company's  cash
equivalents and restricted  investments.  Cash equivalents  generally consist of
overnight investments while the restricted  investments at December 31, 2002 are
principally comprised of an investment in a Federal Home Loan Bank Discount Note
which was  purchased  at a discount  of 1.64% and  matures  March 7, 2003 and an
investment in the Federated Treasury Obligations Fund. These investments are not
significantly  exposed to interest rate risk,  except to the extent that changes
in interest rates will  ultimately  affect the amount of interest  income earned
and cash flow from these investments.

The Company does not currently  have any  derivative  financial  instruments  in
place to manage interest costs, but that does not mean that the Company will not
use them as a means to manage interest rate risk in the future.

The  Company  does  not use  foreign  currency  exchange  forward  contracts  or
commodity  contracts  and  does  not  have  foreign  currency  exposure  in  its
operations.



Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Financial Statements on Page 20

Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

None.


                                       13


                                    Part III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following  tables set forth certain  information with respect to persons who
are  members  of the Board of  Directors  of the  Company  or who are  Executive
Officers of the Company.

Name                     Age                   Position

Len Wolman               48             Chairman of the Board and Chief
                                        Executive Officer
Alan Angel               46             Chief Financial Officer
Del J. Lauria            54             Director and Secretary
Mark Wolman              45             Director
Stephan F. Slavik        56             Director
Richard Slavik           52             Vice President

Len Wolman.  Mr.  Wolman has been the Chairman of the Board of Directors and the
Chief  Executive of the Company since its formation.  Since 1986, Mr. Wolman has
been the Chairman of the Board of Directors and the Chief  Executive  Officer of
the Waterford  Hotel Group,  Inc. Mr.  Wolman is a managing  partner of TCA. Mr.
Wolman was  instrumental  in the  formation of the  relationship  of TCA and the
Tribe and had been actively  working with the Tribe in connection with obtaining
federal  recognition,  acquiring  the site for the Mohegan Sun and obtaining the
financing to construct the Mohegan Sun. Mr. Wolman was actively  involved in the
development,  construction  and  operation of the Mohegan  Sun.  Mr.  Wolman has
served as President and Chief Executive  Officer of Finance since its inception.
Mr. Wolman is a Director and Officer of Slavik  Suites,  Inc.,  one of Waterford
Group's members. Mr. Wolman is the brother of Mr. Mark Wolman. Mr. Wolman's wife
and Mr. Angel's wife are sisters.

Alan Angel. Mr. Angel became Chief Financial  Officer of the Company in January,
1999.  Since  1997,  Mr.  Angel has been the Chief  Financial  Officer of Mystic
Suites, L.L.C. Mystic Suites,  L.L.C. is a commercial  development firm based in
eastern  Connecticut which currently holds an ownership  interest in a number of
hotels  managed by the  Waterford  Hotel  Group,  Inc.  Prior to joining  Mystic
Suites,  L.L.C., Mr. Angel resided in South Africa and served as Chief Financial
Officer of Rowan & Angel cc. Mr. Angel is a certified  public  accountant  and a
chartered accountant.  Mr. Angel has over 20 years of accounting experience. Mr.
Angel's wife and Mr. Len Wolman's wife are sisters.

Del J. Lauria.  Mr.  Lauria  became a Director of the Company,  Chief  Financial
Officer and  Secretary  upon its  formation.  Mr.  Lauria was succeeded as Chief
Financial  Officer in January  1999 by Mr.  Alan  Angel.  Mr.  Lauria is also an
Officer and Director of the Waterford  Hotel Group,  Inc. and is Executive  Vice
President and Director of Slavik Suites, Inc. Mr. Lauria first joined the Slavik
Organization in 1980 as the Chief Financial  Officer of its real estate property
management  division.  The Slavik  Organization  is an affiliated  group of full
service real estate companies first  established in Michigan in the early 1950s.
Mr. Lauria  rapidly  advanced at the Slavik  Organization  and  currently  holds
various key managerial  positions  within the  enterprise.  Prior to joining the
Slavik  Organization,  Mr. Lauria was associated  with the  accounting  firm now
known as Deloitte & Touche and is a certified public accountant.  Mr. Lauria has
served as Treasurer and Secretary of Finance since its inception.

Mark  Wolman.  Mr.  Mark  Wolman  became  a  Director  of the  Company  upon its
formation.  Mr.  Wolman is the  president  of Wolman  Homes,  Inc.  d/b/a Wolman
Construction.  Wolman Homes,  Inc. is a commercial  development and construction
firm based in eastern  Connecticut.  Mr. Mark Wolman has been  working  with the
Mohegan  Tribe since 1992 and had been  instrumental  in  assisting  the Mohegan
Tribe in obtaining a number of  governmental  approvals in  connection  with the
development  and  construction of the Mohegan Sun. Mr. Mark Wolman is a Director
of Slavik Suites, Inc. Mr. Mark Wolman is the brother of Mr. Len Wolman.

Stephan F. Slavik.  Mr. Slavik, was appointed a Director of the Company on April
9, 2001.  Mr. Slavik is the  President of Michigan  based Slavik  Builders.  Mr.
Slavik has over 30 years of experience with all phases of land planning, product
design,  estimating  and  site  construction  in  single  family,  multiple  and
commercial  design/build  developments.  Mr.  Slavik  is  a  Director  and  Vice
President  of Slavik  Suites,  Inc.  Mr.  Slavik is the  brother of Mr.  Richard
Slavik.

Mr.  Richard  Slavik.  Mr.  Richard Slavik was appointed a Vice President of the
Company on April 9, 2001. Mr. Richard Slavik is Chief  Operating  Officer of the
Fourmidable  Group,  Inc., a Michigan  based real estate  management  firm.  Mr.
Richard  Slavik  has over 20  years of  constructing  and  operating  commercial
residential  real estate  experience.  Mr. Richard Slavik is President of Slavik
Suites, Inc. Mr. Richard Slavik is the brother of Mr. Stephan F. Slavik.


                                       14

Item 11.  EXECUTIVE COMPENSATION

The following table  summarizes the  compensation  paid to the Directors and the
named Executive Officers of the Company.

  Name                      Year Ended              Salary
 ------                    ------------            --------

Len Wolman (1)                2002                 $835,086
                              2001                 $707,153
                              2000                 $660,037

Del Lauria                    2002                 $    ---
                              2001                 $    ---
                              2000                 $    ---


Stephan F. Slavik             2002                 $    ---
                              2001                 $    ---
                              2000                 $    ---


Mark Wolman                   2002                 $    ---
                              2001                 $    ---
                              2000                 $    ---


From January 1, 2000, the Company's Directors have also received compensation as
part of the  operating  expenses of TCA as detailed  under point a) of the table
set forth above under "Amended and Restated Omnibus  Termination  Agreement" and
until January 1, 2000 the Company's  Directors received  compensation as part of
the operating expenses and management  services fee of TCA. The Company does not
have a compensation  committee,  and all compensation  decisions are made by the
Board of Directors.

     (1)  As detailed in Item 13, Mr. Len Wolman has an employment contract with
          the Company.  For the years ended  December 31, 2002,  2001, and 2000,
          $835,086,  $707,153 and  $660,037,  respectively,  was paid to Mr. Len
          Wolman pursuant to the employment contract.



Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Company's sole member is Waterford Group, L.L.C.

The following  table sets forth the beneficial  ownership  interest in Waterford
Group, L.L.C.

Name of                            % Ownership
Beneficial Owner                  in the Company
----------------                  --------------

LMW Investments, Inc. (1)            32.2033%
Slavik Suites, Inc. (2)              67.7967%
                                    ---------
                                    100.0000%
                                    =========

(1)  LMW  Investments,  Inc.  is owned 50% by Mr. Len Wolman and 50% by Mr. Mark
     Wolman.  The address for LMW  Investments,  Inc. is 914 Hartford  Turnpike,
     P.O. Box 715, Waterford, Connecticut 06385.

(2)  Messrs.  Len  and  Mark  Wolman  each  own  approximately  11.875% of   the
     outstanding  shares of Slavik Suites,  Inc.  Messrs.  Stephan F. Slavik and
     Richard Slavik each own approximately  14.35% of the outstanding  shares of
     Slavik Suites,  Inc. The address for Slavik  Suites,  Inc. is 32605 West 12
     Mile Road, Suite 350, Farmington Hills, Michigan 48334.

The Company does not currently have in place any equity compensation plans.

                                       15


Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Len  Wolman,  the  Company's  Chairman of the Board of  Directors  and Chief
Executive Officer is a managing partner of TCA.

On February 9, 1998 the Development Services Agreement Phase II was entered into
between TCA and KIML.  Pursuant to the Development  Services Agreement Phase II,
TCA  subcontracted  with KIML and KIML agreed to perform those services assigned
to KIML by TCA in  order to  facilitate  TCA's  fulfillment  of its  duties  and
obligations to the Authority  under the Development  Agreement.  The Development
Services  Agreement Phase II was subsequently  assigned to Kerzner  Investments.
TCA shall pay to Kerzner  Investments a fee, as subcontractor  (the "Development
Services  Fee Phase II")  equal to 3% of the  development  costs of the  Project
exclusive of capitalized interest,  less all costs incurred by TCA in connection
with  the  Project.  The  Development  Services  Fee  Phase  II shall be paid in
installments  due on December 31, 1999 and 2000 and on the  Completion  Date, as
defined in the Development  Agreement,  with a final payment being made when the
actual  development  costs  of  the  Project  are  known.  The  payment  of  the
Development Services Fee Phase II will be made from available cash flow, if any,
in accordance with the Amended and Restated Omnibus Termination Agreement.  KIML
has further subcontracted with Construction to provide certain of those services
assigned to KIML by TCA.  This Local  Construction  Services  Agreement was also
assigned  to Kerzner  Investments.  The fee  payable by Kerzner  Investments  to
Construction as and when Kerzner Investments receives payment from TCA is 20.83%
of the Development  Services Fee Phase II.  Construction has subcontracted  with
The Slavik  Company for 14.30% of its fee. On April 26, 2000,  July 26, 2000 and
January 26, 2001, TCA paid $3,095,000,  $1,238,000 and $6,474,000  respectively,
as partial  payment  Development  Services Fee Phase II.  Construction  received
$644,688,  $257,875 and  $1,348,534,  respectively,  and  Construction  paid The
Slavik Company  $92,190,  $36,876 and $192,840 on April 26, 2000,  July 26, 2000
and January 26, 2001, respectively.

Construction  is owned 50% by Mr.  Len Wolman  (the  Company's  Chief  Executive
Officer and  Chairman of the Board of  Director)  and 50% by Mr. Mark Wolman ( a
member of the Company's  Board of  Directors).  Mr. Del J. Lauria (the Company's
Secretary  and a member of the Company's  Board of  Directors),  Mr.  Stephan F.
Slavik (a member of the Company's  Board of Directors)  and Mr.  Richard  Slavik
(Vice President of the Company) have a financial interest in The Slavik Company.

On September 28, 1998, the Company entered into an employment agreement with Mr.
Len Wolman.  The  employment  agreement  provides  for a base  annual  salary of
$250,000  reduced by any  amounts Mr.  Wolman  receives as a salary from TCA for
such period. Pursuant to such employment agreement, the Company shall pay to Mr.
Wolman an amount equal to 0.05% of the Revenues of the Mohegan Sun including the
expansion to the extent Mr.  Wolman has not  received  such amounts from TCA. On
and after  January  1,  2004,  the  Company  shall pay to Mr.  Wolman  incentive
compensation  based on the Revenues of the Mohegan Sun, including the expansion,
as a percentage  (ranging  from .00% to .10%) to be  determined  using a formula
attached  to  the  employment   agreement  which  compares  actual  revenues  to
predetermined  revenue targets.  For the years ended December 31, 2002, 2001 and
2000,   the  Company  paid  and  incurred   $835,086,   $707,153  and  $660,037,
respectively, pursuant to the employment agreement.

In  2002,  2001  and  2000,   approximately  $46,000,   $903,000  and  $976,000,
respectively was paid to the principals and affiliates of the Company as part of
TCA's operating expenses.

In 1999,  the  Company  renovated  Mr. Len  Wolman's  office  space at a cost of
$32,413,  of which $30,000 was paid to Wolman Homes,  Inc. a related party. Cost
of the improvement is being depreciated over five years. Expense for each of the
years ended December 31, 2002, 2001 and 2000 was $6,480.

Waterford  Group,  Slavik  and the other  principals  of  Waterford  Group  have
interests  in and may acquire  interests in hotels in  southeastern  Connecticut
which have or may have  arrangements with the Mohegan Sun to reserve and provide
hotel rooms to patrons of the Mohegan Sun.


                                       16


                                     Part IV

ITEM 14.  CONTROL PROCEDURES

(a)   Evaluation of Disclosure Controls and Procedures

The Company  maintains  disclosure  controls and procedures that are designed to
ensure that information  required to be disclosed in the Company's reports filed
with,  or furnished  to, the  Securities  and Exchange  Commission,  or the SEC,
pursuant  to  the  Securities  Exchange  Act of  1934  is  recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms,  and  that  such  information  is  accumulated  and  communicated  to the
Company's management,  including its Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required disclosure
based  on the  definition  of  "disclosure  controls  and  procedures"  in  Rule
13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934.

Within 90 days prior to the date of this  report,  the  Company  carried  out an
evaluation,  under the supervision and with the  participation  of the Company's
management,  including the Company's Chief  Executive  Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on the foregoing evaluation,
the Company's Chief Executive Officer and Chief Financial Officer concluded that
the Company's disclosure controls and procedures were effective.

(b)   Changes in Internal Controls

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the  evaluation  of those  controls  by the Chief  Executive  Officer  and Chief
Financial  Officer,   including  any  corrective  actions  with  regard  to  any
significant deficiencies and material weaknesses.  The Company believes that its
internal controls and procedures are effective.



                                       17

Item 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  Exhibits
     --------

               Exhibit No.    Description
                 3.1          Certificate of Formation, as amended, of Waterford
                                 Gaming, LLC (i)
                 3.2          Certificate of Incorporation of Waterford Gaming
                                Finance Corp. (i)
                 3.3          Bylaws of Waterford Gaming Finance
                              Corp. (i)
                 4.1          Indenture, dated as of November 8, 1996, between
                              Waterford Gaming, L.L.C. and Waterford Gaming
                              Finance Corp., the issuers, and Fleet National
                              Bank, as trustee, relating to $65,000,000 12-3/4%
                              Senior Notes due 2003. (i)
                 4.1.1        First Supplemental Indenture, dated as of March 4,
                              1999, among Waterford Gaming, L.L.C. and Waterford
                              Gaming Finance, Corp., as issuers, and State
                              Street Bank and Trust Company, as trustee,
                              relating to $65,000,000 12-3/4% Senior Notes due
                              2003.  (vi)
                 4.2          Indenture, dated as of March 17, 1999, among
                              Waterford Gaming, L.L.C. and Waterford Gaming
                              Finance Corp., as issuers, and State Street Bank
                              and Trust Company, as trustee, relating to
                              $125,000,000 9-1/2% Senior Notes
                              due 2010.  (vi)
                 4.3          Security and Control Agreement, dated as of March
                              17, 1999, among Waterford Gaming, L.L.C. and
                              Waterford Gaming Finance Corp., as pledgors and
                              State Street Bank and Trust Company, as securities
                              intermediary.  (vi)
                 4.4          Specimen Form of 9-1/2% Senior Notes due 2010
                              (included in Exhibit 4.2).  (vi)
                 10.1         Omnibus Financing Agreement, dated as of September
                              21, 1995, between Trading Cove Associates and Sun
                              International Hotels Limited. (i)
                 10.2         First Amendment to the Omnibus Financing
                              Agreement, dated as of October 19, 1996, among
                              Trading Cove Associates, Sun International Hotels
                              Limited and Waterford Gaming, L.L.C. (i)
                 10.2.1       Amended and Restated Omnibus Financing Agreement
                              dated September 10, 1997 (ii)
                 10.2.2       Omnibus Termination Agreement, dated as of March
                              18, 1999, among Sun International Hotels Limited,
                              Trading Cove Associates, Waterford Gaming, L.L.C.,
                              Sun International Management Limited, LMW
                              Investments, Inc., Sun Cove Limited, Slavik
                              Suites, Inc., and Wolman Construction, L.L.C.(vi)
                 10.2.3       Amended and Restated Omnibus Termination
                              Agreement, dated as of January 1, 2000 and
                              effective as of March 18, 1999, among Sun
                              International Hotels Limited, Trading Cove
                              Associates, Waterford Gaming, L.L.C., Sun
                              International Management Limited, LMW Investments,
                              Inc., Sun Cove Limited, Slavik Suites,Inc.,
                              and Wolman Construction, L.L.C. (vii)


                                       18

                 10.3         Amended and Restated Partnership Agreement of
                              Trading Cove Associates, dated as of September 21,
                              1994, among Sun Cove Limited, RJH Development
                              Corp., Leisure Resort Technology, Inc., Slavik
                              Suites , Inc., and LMW Investments, Inc. (i)
                 10.4         First Amendment to Amended and Restated
                              Partnership Agreement of Trading Cove Associates,
                              dated as of October 22, 1996, among Sun Cove
                              Limited, Slavik Suites, Inc., RJH Development
                              Corp., LMW Investments, Inc. and Waterford Gaming,
                              L.L.C. (i)
                 10.5         Purchase Agreement, dated as of March 10, 1999,
                              among Waterford Gaming, L.L.C., Waterford Gaming
                              Finance Corp., Bear, Stearns & Co., Inc., Merrill
                              Lynch, Pierce, Fenner and Smith Inc. and Salomon
                               Smith Barney. (vi)
                 10.5.1       Agreement with Respect to Redemption or Repurchase
                              of Subordinated Notes, dated September 10,
                              1997(ii)
                 10.6         Amended and Restated Limited Liability Company
                              Agreement of Waterford Gaming, L.L.C., dated as of
                              March 17, 1999 by Waterford Group, L.L.C.  (vi)
                 10.7         Note Purchase Agreement, dated as of October 19,
                              1996, among Sun International Hotels Limited,
                              Waterford Gaming, L.L.C. and Trading Cove
                                 Associates. (i)
                 10.8         Note Purchase Agreement, dated as of September 29,
                              1995, between the Mohegan Tribal Gaming Authority
                              and Sun International Hotels Limited relating to
                              the Subordinated Notes. (i)
                 10.9         Management Agreement, dated as of July 28, 1994,
                              between the Mohegan Tribe of Indians of
                              Connecticut and Trading Cove Associates. (i)
                 10.10        Management Services Agreement, dated September 10,
                              1997. (ii)
                 10.11        Development Services Agreement, dated September
                              10, 1997. (ii)
                 10.12        Subdevelopment Services Agreement, dated September
                              10, 1997. (ii)
                 10.13        Completion Guarantee and Investment Banking and
                              Financing Arrangement Fee Agreement, dated
                              September 10, 1997. (ii)
                 10.14        Settlement and Release Agreement, dated January 6,
                              1998, by and among Leisure Resort Technology,
                              Inc., Lee R. Tyrol, Trading Cove Associates,
                              Slavik Suites, Inc., LMW Investments, Inc., RJH
                              Development Corp., Waterford Gaming, L.L.C. and
                              Sun Cove Limited. (iii)
                 10.15        Waiver and Acknowledgment of Noteholder. (iv)
                 10.16        Relinquishment Agreement, dated February 7, 1998,
                              between the Mohegan Tribal Gaming Authority and
                              Trading Cove Associates.  (v)
                 10.17        Development Services Agreement, dated February 7,
                              1998, between the Mohegan Tribal Gaming Authority
                              and Trading Cove Associates.  (v)
                 10.18        Agreement, dated September 28, 1998, by and among,
                              Waterford Gaming, L.L.C., Slavik Suites, Inc., LMW
                              Investments, Inc., Len Wolman, Mark Wolman,
                              Stephan F. Slavik, Sr. and Del J. Lauria (Len
                              Wolman's Employment Agreement).  (v)
                 10.19        Agreement Relating to Development Services, dated
                              as of February 9, 1998, between Trading Cove
                              Associates and Sun International Management
                              Limited.  (vi)
                 10.20        Local Construction Services Agreement, dated as of
                              February 9, 1998 between Sun International
                              Management Limited and Wolman Construction,
                              L.L.C. (vi)
                 10.21        Escrow Deposit Agreement, dated as of the 3rd day
                              of March 1999, by and among the Mohegan Tribal
                              Gaming Authority and First Union National Bank, as
                              Defeasance Agent.  (vi)
                 21.1         Subsidiaries of Waterford Gaming,
                              L.L.C. (i)
                 21.2         Subsidiaries of Waterford Gaming Finance Corp. (i)


(i)      Incorporated by reference to the Registrant's  Registration  Statement
         on Form S-4,  Securities and Exchange  Commission  (the  "Commission")
         File No. 333-17795, declared effective on May 15, 1997.

(ii)     Incorporated by reference to the Registrant's Quarterly Report on Form
         10-Q for the period  ended  September  30, 1997,  Commission  File No.
         333-17795, as accepted by the Commission on November 14, 1997.

(iii)    Incorporated by reference to the Registrant's Annual Report on Form
         10-K for the fiscal year ended December 31, 1997, Commission File No.
         333-17795, as accepted by the Commission on March 30, 1998.

(iv)     Incorporated by reference to the Registrant's Quarterly Report on Form
         10-Q  for the  period  ended  March  31,  1998,  Commission  File  No.
         333-17795, as accepted by the Commission on May 14, 1998.

(v)      Incorporated by reference to the Registrant's Quarterly Report on Form
         10-Q for the period  ended  September  30, 1998,  Commission  File No.
         333-17795, as accepted by the Commission on November 13, 1998.

(vi)     Incorporated by reference to the Registrant's Quarterly Report on Form
         10-Q  for the  period  ended  March  31,  1999,  Commission  File  No.
         333-17795 as accepted by the Commission on May 17, 1999.

(vii)    Incorporated by reference to the Registrant's Quarterly Report on Form
         10-Q for the period ended March 31, 2001, Commission File No. 333-17795
         as accepted by the Commission on May 14, 2001.


                                       19

(b)  Financial Statement Schedules
     -----------------------------

INDEX TO FINANCIAL STATEMENTS

        Report of Independent Accountants                               F-1
        Financial Statements:
        Balance Sheets as of December 31, 2002 and 2001                 F-2
        Statements of Operations for the years ended
                December 31, 2002, 2001 and 2000                        F-3
        Statements of Changes in Member's Deficiency for the
                years ended December 31, 2002, 2001 and 2000            F-4
        Statements of Cash Flows for the years ended
                December 31, 2002, 2001 and 2000                        F-5
        Notes to Financial Statements                                   F-6



                                       20


                        REPORT OF INDEPENDENT ACCOUNTANTS


TO THE MEMBER OF
WATERFORD GAMING, L.L.C.



In our opinion,  the accompanying  balance sheets and the related  statements of
operations,  changes in member's deficiency and of cash flows present fairly, in
all material respects,  the financial position of Waterford Gaming,  L.L.C. (the
"Company") at December 31, 2002 and 2001 and the results of its  operations  and
its cash flows for each of the three years in the period ended December 31, 2002
in conformity with accounting principles generally accepted in the United States
of America.  These financial  statements are the responsibility of the Company's
management;  our  responsibility  is to express  an  opinion on these  financial
statements  based on our audits.  We conducted our audits of these statements in
accordance with auditing  standards  generally  accepted in the United States of
America  which  require that we plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.


PricewaterhouseCoopers LLP



March 18, 2003

                                       F-1

                            Waterford Gaming, L.L.C.

                                 Balance Sheets

                           December 31, 2002 and 2001
                            -------------------------


                                                2002              2001
                                            ------------      ------------


        ASSETS

Current assets
   Cash and cash equivalents               $  4,658,602       $  3,570,949
   Restricted investments                    10,344,130         26,189,434
   Due from Trading Cove Associates          11,021,500          8,357,604
   Other current assets                           7,965              9,072
                                           ------------       ------------
        Total current assets                 26,032,197         38,127,059
                                           ------------       ------------

Trading Cove Associates-equity
  investment                                  5,447,338          5,778,458
Beneficial interest-Leisure Resort
  Technology, Inc.                            4,540,039          4,918,029
Deferred  financing  costs,
  net of  accumulated  amortization  of
  $1,391,838 and $1,024,974 at
  December 31, 2002 and 2001, respectively    2,643,338          3,010,202
Fixed assets, net of accumulated
  depreciation of $42,222 and $31,442 at
  December 31, 2002 and 2001, respectively       11,696             22,476
                                           ------------       ------------
                Total assets               $ 38,674,608       $ 51,856,224
                                           ============       ============


        LIABILITIES AND MEMBERS' DEFICIENCY

Current liabilities
   Accrued expenses and accounts payable   $    111,996       $    171,610
   Accrued interest on senior notes
     payable                                  3,021,196          3,228,946
                                           ------------       ------------

        Total current liabilities             3,133,192          3,400,556
                                           ------------       ------------

9-1/2% senior notes payable                 108,007,000        115,434,000
                                           ------------       ------------

        Total liabilities                   111,140,192        118,834,556
                                           ------------       ------------

Contingencies                                   ---                ---

Members' deficiency                         (72,465,584)       (66,978,332)
                                           ------------       ------------
                Total liabilities
                and members' deficiency    $ 38,674,608       $ 51,856,224
                                           ============       ============


The accompanying notes are an integral part of these financial statements.

                                       F-2



                            Waterford Gaming, L.L.C.

                            Statements of Operations

              For the Years Ended December 31, 2002, 2001 and 2000
                           --------------------------

<TABLE>
<S>                                      <C>               <C>              <C>
                                              2002               2001              2000
                                          ------------      ------------      ------------

Revenue
   25% of relinquishment payments-
     Trading Cove Associates              $ 25,382,500      $  9,728,580      $    ---
   Organizational and administrative
     fee income-Trading Cove
     Associates                                ---            11,810,877        11,649,600
   Interest and dividend income                534,012         1,330,711         1,894,738
   Subordinated notes fee income-
     Trading Cove Associates                   ---               ---               692,782
   Completion guarantee notes fee
     income-Trading Cove Associates            ---               ---               215,625
                                          ------------      ------------      ------------
        Total revenue                       25,916,512        22,870,168        14,452,745
                                          ------------      ------------      ------------
Expenses
   Interest expense                         11,080,139        11,560,994        11,641,049
   Salaries-related parties                    835,086           707,153           660,037
   General and administrative                  431,223           555,819           526,526
   12-3/4% senior notes tender expense         ---               ---               (90,000)
   Amortization of beneficial interest-
     Leisure Resort Technology, Inc.           377,990           377,990           377,990
   Amortization on deferred financing
     costs                                     366,864           366,864           363,985
   Depreciation                                 10,780            10,780            10,780
                                          ------------      ------------      ------------
        Total expenses                      13,102,082        13,579,600        13,490,367
                                          ------------      ------------      ------------
                                            12,814,430         9,290,568           962,378
   Equity in income (loss)of
    Trading Cove Associates                    218,880        (2,715,996)         (574,002)
                                          ------------      ------------      ------------
        Net income                        $ 13,033,310      $  6,574,572      $    388,376
                                          ============      ============      ============

The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       F-3



                            Waterford Gaming, L.L.C.

                  Statements of Changes in Members' Deficiency

              For the Years Ended December 31, 2002, 2001 and 2000
                           --------------------------



<TABLE>

<S>                                  <C>


Balance, January 1, 2000                    $ (34,470,438)

Distributions                                 (37,731,182)

Net income                                        388,376
                                            -------------

Balance, December 31, 2000                    (71,813,244)

Distributions                                  (1,739,660)

Net income                                      6,574,572
                                            -------------

Balance, December 31, 2001                    (66,978,332)

Distributions                                 (18,520,562)

Net income                                     13,033,310
                                            -------------
Balance, December 31, 2002                  $ (72,465,584)
                                            =============

The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       F-4




                            Waterford Gaming, L.L.C.

                            Statements of Cash Flows

               For the Years ended December 31, 2002, 2001 and 2000

                           --------------------------
<TABLE>

<S>                                            <C>              <C>             <C>
                                                   2002             2001            2000
                                               ------------     ------------    ------------

Cash flows from operating activities
   Net income                                  $ 13,033,310     $  6,574,572     $   388,376
                                               ------------     ------------    ------------
   Adjustments to reconcile net income
     to net cash provided by (used in)
     operating activities
        Amortization                                744,854          744,854         741,975
        Depreciation                                 10,780           10,780          10,780
        Equity in (income)loss of Trading
          Cove Associates                          (218,880)       2,715,996         574,002
        Changes in operating assets
          and liabilities
            Increase in due from
              Trading Cove Associates            (2,663,896)      (4,587,604)     (3,277,093)
            Decrease in other
              assets                                  1,107           17,424          60,325
            (Decrease) increase in accrued
              expenses and accounts payable         (59,614)          37,996          14,134
             Decrease in accrued
              interest on senior notes
              payable                              (207,750)        (119,077)        (69,036)
                                               ------------     ------------    ------------
                  Total adjustments              (2,393,399)      (1,179,631)     (1,944,913)
                                               ------------     ------------    ------------

               Net cash provided by
                (used in) operating
                 activities                      10,639,911        5,394,941      (1,556,537)
                                               ------------     ------------    ------------

   Cash flows from investing activities
     Contributions to Trading Cove
      Associates                                 (1,000,000)      (1,350,000)     (1,200,000)
     Distributions from Trading Cove
       Associates                                 1,550,000          800,000       1,723,112
    Sales and (purchases) of
       restricted investments-net                15,845,304          698,647     (15,080,989)
                                               ------------     ------------    ------------

                Net cash provided by
                 (used in) investing
                  activities                     16,395,304          148,647     (14,557,877)
                                               ------------     ------------    ------------

   Cash flows from financing activities
     Distributions to member                    (18,520,562)      (1,739,660)    (37,731,182)
     Redemption of 9-1/2% senior notes           (7,427,000)      (4,257,000)     (2,468,000)
                                               ------------     ------------    ------------
                Net cash used in
                  financing activities          (25,947,562)      (5,996,660)    (40,199,182)
                                               ------------     ------------    ------------

   Net increase (decrease) in cash
     and cash equivalents                         1,087,653         (453,072)    (56,313,596)

   Cash and cash equivalents at
     beginning of year                            3,570,949        4,024,021      60,337,617
                                               ------------     ------------    ------------
   Cash and cash equivalents at
     end of year                               $  4,658,602     $  3,570,949    $  4,024,021
                                               ============     ============    ============
   Supplemental disclosure of cash flow information:
       Cash paid during the year
         for interest                          $ 11,287,889     $ 11,680,071    $ 11,710,084
                                               ============     ============    ============
   Supplemental disclosure of non-cash financing activities:
       Deferred financing costs overaccrued
       through accrued expenses and
        accounts payable                       $    ---         $    ---        $    (40,000)
                                               ============     ============    ============

The accompanying notes are an integral part of these financial statements.

</TABLE>


                                       F-5

                            WATERFORD GAMING, L.L.C.

                          NOTES TO FINANCIAL STATEMENTS
                           --------------------------


ORGANIZATION, MEMBERSHIP AGREEMENT, CHANGE OF OWNERSHIP AND MEMBER ALLOCATIONS:

Waterford Gaming, L.L.C. (the "Company"),  a Delaware limited liability company,
was formed on September  30, 1996.  The Company  initially  acquired and owns an
interest in Trading Cove Associates ("TCA") a Connecticut  general  partnership,
and invested in certain notes issued by the Mohegan Tribal Gaming Authority (the
"Authority").  The Company is governed by a Board of  Directors  pursuant to the
limited liability company  agreement (the  "Agreement").  In connection with the
Company's and the Company's  wholly-owned  subsidiary  Waterford  Gaming Finance
Corp.  ("Finance")  issuance of $125 million  9-1/2%  senior notes payable which
mature March 15, 2010 (the "$125 Million Senior Notes"),  each of Slavik Suites,
Inc.  ("Slavik")  and LMW  Investments,  Inc.  ("LMW")  have  contributed  their
respective  interests in the Company as of March 17, 1999 to a Delaware  limited
liability company,  Waterford Group, L.L.C. (the "Waterford  Group").  Waterford
Group is now the sole member of the Company.  Slavik and LMW own Waterford Group
in the same respective  interest as they had in the Company and are generally as
follows:

         Slavik Suites, Inc.                     67.7967%
         LMW Investments, Inc.                   32.2033%
                                                ---------
                                                100.0000%
                                                =========

The Agreement is effective until September 30, 2020 and may be terminated by the
member or any other event as stated in the Agreement.

During  December 1999, the Company  received a payment on notes it held due from
the Authority and a distribution  from TCA. As  contemplated in the $125 Million
Senior Notes offering (the "Offering"),  the Company  distributed  approximately
$34,672,000  to Waterford  Group during  January 2000.  In  connection  with the
Offering the Company  distributed  $37,050,000  to Waterford  Group during March
1999. On November 1, 2002 the Company distributed $15,000,000 to Waterford Group
in  accordance  with the terms of the  indenture  relating  to the $125  Million
Senior  Notes  (the  "Indenture").   In  addition  tax  distributions   totaling
approximately  $9,206,000  were made by the Company during 2002,  2001, 2000 and
1999. On January 13, 2003 the Company distributed  $1,290,900 to Waterford Group
as a tax distribution, in accordance with the terms of the Indenture.

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

        Accounting Method

          The accrual  method of  accounting is used in the  preparation  of the
          financial statements.

        Cash and Cash Equivalents

          Cash and cash equivalents represent cash and short-term, highly liquid
          investments with original maturities of three months or less.

        Restricted Investments

          Restricted  investments at December 31,2002 are principally  comprised
          of an investment in a Home Loan Bank Discount Note which was purchased
          at a discount of 1.64% and matures  March 7, 2003 and an investment in
          the Federated  Treasury  Obligations Fund and at December 31, 2001 are
          principally  comprised of an investment in a Federal National Mortgage
          Association  Discount  Note which was purchased at a discount of 3.65%
          and matured  March 6, 2002.  The  investments  represent a  restricted
          investment fund that has been  established  with a trustee in terms of
          the  Indenture  and is reported at cost plus accrued  interest,  which
          approximates market.

        Trading Cove Associates - Equity Investment

          The Trading Cove  Associates  - equity  investment  is  accounted  for
          utilizing the equity method. Included in the investment is $10,600,000
          which  represents the purchase  price paid to a corporation  for their
          12.5%  interest  in TCA.  This  amount was  initially  amortized  on a
          straight-line  basis over a 7-year term,  which represents the term of
          the management agreement between TCA and the Authority,  through March
          1999.  As a  result  of  the  Relinquishment  Agreement,  as  defined,
          becoming  effective the remaining  balance will be amortized  over 189
          months beginning April 1999.

        Deferred Financing Costs

          All costs  incurred  with the issuance of the  Company's and Finance's
          $125 Million  Senior Notes,  were  capitalized  and are amortized on a
          straight-line  basis over the 11-year term of the $125 Million  Senior
          Notes.

        Fixed Assets

          Fixed  Assets are  stated at cost.  Depreciation  is  charged  against
          income over the estimated life of the fixed assets. The estimated life
          is five years for furniture and fixtures and leasehold improvements.

        Income Taxes

          The Company,  as a wholly owned subsidiary of Waterford Group does not
          file federal or state income tax  returns.  As a result,  no provision
          for federal and state income  taxes has been made in the  accompanying
          financial statements.

        Revenue Recognition

          The Company  receives  revenues from TCA in accordance with an Amended
          and Restated  Omnibus  Termination  Agreement.  The amount of revenues
          earned relies on the fees earned by TCA pursuant to its Relinquishment
          Agreement and Development  Agreement with the Authority.  Revenues are
          accrued when amounts are determinable and payment is assured.

        Concentration of Credit Risk

          The Company has one primary source of revenue:  payments from TCA. The
          Company anticipates regular payments from TCA based upon the operating
          results of the  Authority  and the  related  Relinquishment  Fees,  as
          defined,  and Development Fee, as defined,  paid and to be paid by the
          Authority.   Financial  instruments,  which  potentially  subject  the
          Company to a concentration of credit risk, principally consist of cash
          in excess of the financial institutions' insurance limits. The Company
          invests available cash with high credit quality institutions.

        Fair Value of Financial Instruments

          Fair  values  generally  represent  estimates  of  amounts  at which a
          financial  instrument could be exchanged  between willing parties in a
          current transaction other than forced liquidation.

          Fair value  estimates are  subjective and are dependent on a number of
          significant  assumptions,  based on  management's  judgment  regarding
          future expected loss  experience,  current economic  conditions,  risk
          characteristics of various financial  instruments,  and other factors.
          In addition,  technical pronouncements allow a wide range of valuation
          techniques,  therefore, comparisons between entities, however similar,
          may be difficult.

        Use of Estimates

          The  preparation of financial  statements in conformity with generally
          accepted  accounting  principles  in  the  United  States  of  America
          requires  management to make estimates and assumptions that affect the
          reported   amounts  of  assets  and   liabilities  and  disclosure  of
          contingent  assets  and  liabilities  at the  date  of  the  financial
          statements,  as well as the reported  amounts of revenues and expenses
          during the reporting  period.  Actual  results could differ from those
          estimates.


                                       F-6

2.   TRADING COVE ASSOCIATES - EQUITY INVESTMENT:

TCA was  organized  on July 27,  1993.  The  primary  purpose of TCA has been to
assist the  Mohegan  Tribe of  Indians  of  Connecticut  (the  "Tribe")  and the
Authority,  an instrumentality  of the Tribe, in obtaining federal  recognition,
negotiated  the  tribal-state  compact with the State of  Connecticut,  obtained
financing  for the  development  of the Mohegan Sun Casino (the  "Mohegan  Sun")
located  on certain  Tribal  land in  Uncasville,  Connecticut,  negotiated  the
Amended and Restated  Gaming  Facility  Management  Agreement  (the  "Management
Agreement") and participated in the design,  development and construction of the
Mohegan Sun, which commenced  operations on October 12, 1996.  Since the opening
of the Mohegan Sun, and until January 1, 2000 TCA had overseen the Mohegan Sun's
day-to-day operations.

TCA will  terminate on December 31, 2040,  or earlier,  in  accordance  with the
terms of the partnership agreement. On November 8, 1996, certain partners of TCA
withdrew  and,  concurrently,  consented  to the  admission  of the Company as a
partner to TCA.  Also, on November 8, 1996,  the Company  acquired an additional
interest  (12.5%) in TCA from a corporation for  $10,600,000.  The Company has a
50% voting and profits  interest in TCA. The  remaining 50% interest is owned by
Kerzner Investments Connecticut, Inc. ("Kerzner Investments"), formerly Sun Cove
Limited,   an   affiliate   of   Kerzner    International    Limited   ("Kerzner
International").

As of December 31, 2002, 2001 and 2000 the following summary information relates
to Trading  Cove  Associates.  Total  revenues  and net income are for the years
ended December 31, 2002, 2001 and 2000.

<TABLE>

<S>                                         <C>              <C>              <C>
                                                2002             2001             2000
                                            ------------     ------------     ------------

Total assets                                $ 27,166,723     $ 23,522,567     $ 21,452,587
Total liabilities                            (24,821,195)     (21,394,854)     (15,872,938)
                                            ------------     ------------     ------------
Partners' capital                           $  2,345,528     $  2,127,713     $  5,579,649
                                            ============     ============     ============

Total revenue                               $ 61,244,405     $ 48,327,998     $ 46,072,404
                                            ============     ============     ============

Net income (loss)                           $  1,317,815     $ (4,551,936)    $   (267,948)
                                            ============     ============     ============



                                                2002             2001             2000
                                            ------------     ------------     ------------
Company's interest:
  Trading Cove Associates -
   equity investment, beginning
   of year                                  $  5,778,458     $  7,944,454     $  9,041,568
  Contributions                                1,000,000        1,350,000        1,200,000
  Distributions                               (1,550,000)        (800,000)      (1,723,112)
                                            ------------     ------------     ------------

                                               5,228,458        8,494,454        8,518,456
                                            ------------     ------------     ------------
Income (loss)from Trading Cove
  Associates                                     658,908       (2,275,968)        (133,974)
Amortization of interests
  purchased                                     (440,028)        (440,028)        (440,028)
                                            ------------     ------------     ------------
Equity in income (loss)of
  Trading Cove Associates                        218,880       (2,715,996)        (574,002)
                                            ------------     ------------     ------------
Trading Cove Associates -
  equity investment, end of year            $  5,447,338     $  5,778,458     $  7,944,454
                                            ============     ============     ============

</TABLE>


Trading Cove Associates - Material Agreements
---------------------------------------------

                                       F-7

Relinquishment Agreement
------------------------

Under the terms of an agreement (the  "Relinquishment  Agreement") TCA continued
to manage the Mohegan Sun under the Management  Agreement until January 1, 2000.
On December 31, 1999 the Management  Agreement  terminated and the Tribe assumed
day-to-day management of the Mohegan Sun. Under this Relinquishment Agreement to
compensate TCA for terminating its rights under the Management Agreement and the
Hotel/Resort Management Agreement,  the Authority has agreed to pay to TCA 5% of
Revenues, as defined,  (the "Relinquishment  Fees") generated by the Mohegan Sun
including the significant  expansion  project (the "Project") during the 15-year
period commencing on January 1, 2000.

The  payments  under the  Relinquishment  Agreement  will be divided into senior
relinquishment  payments and junior relinquishment  payments, each of which will
be 2.5% of Revenues.  Revenues are defined as gross gaming  revenues (other than
Class II gaming revenue, i.e. bingo) and all other facility revenues (including,
without limitation,  hotel revenues,  food and beverage sales, parking revenues,
ticket revenues and other fees or receipts from the convention/events  center in
the  expansion  and all rental or other  receipts  from  lessees,  licensees and
concessionaires  operating in the  facility  but not the gross  receipts of such
lessees, licensees and concessionaires).  Revenues exclude revenues generated by
any other expansion of the Mohegan Sun. Senior  relinquishment  payments will be
payable quarterly in arrears  commencing on April 25, 2000 for the quarter ended
March  31,  2000,  and  the  junior  relinquishment  payments  will  be  payable
semi-annually  in arrears  commencing  on July 25, 2000 for the six months ended
June 30, 2000, assuming sufficient funds are available after satisfaction of the
Tribe's senior obligations.

For the years ended  December 31, 2002 and 2001 the  Relinquishment  Fees earned
were $58,508,703 and $45,715,318,  respectively, based upon Revenues reported to
TCA by the Authority.



Development Agreement
---------------------

TCA and the Authority entered into a development  services agreement on February
7, 1998. Under this "Development  Agreement",  TCA agreed to oversee the design,
construction,  furnishing,  equipping  and  staffing  of the Project for a $14.0
million  development  fee (the  "Development  Fee"). On May 24, 2000 TCA and the
Authority  agreed  that TCA had  performed  and  completed  all its  obligations
relating to the staffing of the Project and that TCA has no further  obligations
relating  to the  staffing  of the  Project.  The  first  phase of the  Project,
including  the Casino of the Sky,  The Shops at Mohegan Sun and the  10,000-seat
Mohegan  Sun  Arena  opened  in  September  2001.  In  April  2002,  734  of the
1,200-hotel  rooms  in the  34-story  luxury  hotel as well as the  meeting  and
convention  space and spa opened.  The balance of the  1,200-hotel  rooms opened
during June 2002.

The Authority will pay the Development Fee to TCA quarterly beginning on January
15, 2000 until the Completion Date, as defined in the Development Agreement,  of
the Project  based on  incremental  completion of the Project as of each payment
date. As of December 31, 2002 total  Development  Fee earned was  $13,832,000 of
which  $13,748,000  had  been  paid by the  Authority.  $84,000  was paid by the
Authority on January 24, 2003.

On February 9, 1998 the Development Services Agreement Phase II was entered into
between TCA and Kerzner International  Management Limited ("KIML").  Pursuant to
the Development  Services  Agreement Phase II, TCA  subcontracted  with KIML and
KIML  agreed  to  perform  those  services  assigned  to KIML by TCA in order to
facilitate  TCA's  fulfillment  of its duties and  obligations  to the Authority
under the Development Agreement. The Development Services Agreement Phase II was
subsequently  assigned  to  Kerzner  Investments.   TCA  shall  pay  to  Kerzner
Investments as subcontractor a Development  Services Fee Phase II equal to 3% of
the  development  costs  of the  Project,  less  all  costs  incurred  by TCA in
connection with the Project. The Development Services Fee Phase II shall be paid
in installments due on December 31, 1999 and 2000 and on the Completion Date, as
defined in the Development  Agreement,  with a final payment being made when the
actual  development  costs of the Project are known.  The fee is to be paid from
available  cash  flow of TCA,  if any,  subordinate  to  certain  other  fees as
described  below under the heading  "Amended  and Restated  Omnibus  Termination
Agreement".

KIML has further subcontracted with Wolman Construction L.L.C.  ("Construction")
(the  "Local  Construction  Services  Agreement")  to  provide  certain of those
services  assigned to KIML by TCA.  This  agreement was also assigned to Kerzner
Investments.  Kerzner  Investments shall pay 20.83% of the Development  Services
Fee  Phase  II as and  when  Kerzner  Investments  receives  payment  from  TCA.
Construction has subcontracted with The Slavik Company for 14.30% of its fee.


Management Agreement
--------------------

The  Management  Agreement  between TCA and the Tribe was entered into on August
30, 1995. The Tribe had assigned its rights and obligations in this agreement to
the Authority. The Authority and TCA had consented to this assignment.


Until  January 1, 2000,  TCA was the  exclusive  manager of the  Mohegan Sun and
earned a management fee from the Authority pursuant to the Management  Agreement
(the  "Management  Fees").  The  Management  Fees were paid  monthly  (the final
payment was  received by TCA from the  Authority  on January 25,  2000) and were
calculated in three tiers based upon net revenues of the Mohegan Sun.



                                       F-8

Amended and Restated Omnibus Termination  Agreement
---------------------------------------------------


Effective March 18, 1999, the Amended and Restated Omnibus Termination Agreement
(the "Amended and Restated Omnibus  Termination  Agreement") was entered into by
TCA, Kerzner International,  the Company, KIML, LMW, Kerzner Investments, Slavik
and  Construction;  which (i) terminated the memorandum of  understanding  dated
February 7, 1998; and (ii) effective  January 1, 2000  terminated a) the Amended
and Restated Omnibus Financing Agreement; b) completion guarantee and investment
banking and financing  arrangement  fee agreement  (the  "Financing  Arrangement
Agreement");  c) the management  services  agreement;  d) the organizational and
administrative services agreement; e) the marketing services agreement; and f) a
letter agreement relating to expenses dated October 19, 1996.

In consideration  for the termination of such agreements,  TCA will use its cash
(primarily  cash from payments from the  Authority for  Relinquishment  Fees and
Development  Fee) to pay the  following  obligations  in the  priority set forth
below:


     (a)  First, to pay all unpaid amounts which may be due under the terminated
          letter  agreement and to pay certain  affiliates of the Company and to
          Kerzner Investments a percentage of an annual fee of $2.0 million less
          the actual expenses  incurred by TCA. Such annual fee shall be payable
          in equal  quarterly  installments  beginning March 31, 2000 and ending
          December 31, 2014.  For the years ended December 31, 2002 and 2001, $0
          and  $1,712,791  ($856,396  to Kerzner  Investments  and  $856,395  to
          affiliates of the Company),  respectively,  had been paid and incurred
          by TCA in terms of the first priority.

     (b)  Second,  to return all capital  contributions  made by the partners of
          TCA after September 29, 1995. TCA anticipates  making capital calls to
          fund expenses  related to the  development  of the Project,  and these
          capital  calls will be  repaid,  based on cash  flow,  in the  quarter
          following the quarter in which the capital call was made. From January
          1, 2000 to December 31, 2002 these  capital  contributions  aggregated
          $7,100,000.  $6,700,000 has been repaid to the partners of TCA, 50% to
          the Company and 50% to Kerzner Investments.

          As of December 31, 2002,  $400,000 in capital  contributions  remained
          outstanding.  On January 28, 2003, a cash distribution of $200,000 was
          made to each partner.

     (c)  Third, to pay any accrued  amounts for obligations  performed prior to
          January  1,  2000  under  the  Financing  Arrangement  Agreement.  All
          required payments were made during 2000.

     (d)  Fourth,  to make the payments set forth in the  agreement  relating to
          the Development Services Agreement Phase II and the Local Construction
          Services  Agreement.  No payments  are required or due at December 31,
          2002. The contingent obligation at December 31, 2002 was approximately
          $10,216,000.

     (e)  Fifth,  to pay  Kerzner  Investments  an  annual  fee of $5.0  million
          payable in equal  quarterly  installments  of $1.25 million  beginning
          March 31, 2000 and ending  December  31,  2006.  For each of the years
          ended  December  31,  2002 and 2001,  $5.0  million  had been paid and
          incurred by TCA in terms of the fifth priority.

     (f)  Sixth,  to pay any accrued  amounts  for  obligations  performed  with
          respect  to periods  prior to  January  1, 2000  under the  management
          services  agreement,  the organizational  and administrative  services
          agreement and the  marketing  services  agreement.  For the year ended
          December 31, 2001, $23,621,754 ($11,810,877 to KIML and $11,810,877 to
          the Company),  had been paid and incurred by TCA in terms of the sixth
          priority. The final required payments were made during 2001.

     (g)  Seventh,  for the period  beginning March 31, 2000 and ending December
          31,  2014,  to  pay  each  of  Kerzner  Investments  and  the  Company
          twenty-five  percent  (25%) of the  relinquishment  payments.  For the
          years ended December 31, 2002 and 2001,  $50,765,000  ($25,382,500  to
          Kerzner  Investments  and  $25,382,500 to the Company) and $19,457,160
          ($9,728,580  to Kerzner  Investments  and  $9,728,580 to the Company),
          respectively,  had  been  paid  and  incurred  by TCA in  terms of the
          seventh priority.  The contingent obligation at December 31, 2002, was
          approximately $2,392,000.

     (h)  Eighth, to distribute all excess cash.


In addition,  TCA shall not make any  distributions  pursuant to the Amended and
Restated Omnibus Termination  Agreement until it has annually distributed to its
partners  pro rata,  the amounts  related to its  partners  tax  obligations  as
described in Section 3.03a(1) of the partnership agreement less twice the amount
of all other funds paid or  distributed to the Company during such year pursuant
to the Amended and Restated Omnibus Termination Agreement.

To the extent TCA does not have adequate  cash to make the payments  pursuant to
the Amended and Restated Omnibus Termination  Agreement,  such amounts due shall
be deferred  without the accrual of interest until TCA has  sufficient  cash, if
any, to pay them.


AMENDED AND RESTATED OMNIBUS FINANCING AGREEMENT
------------------------------------------------

Until January 1, 2000 TCA's primary source of revenue was Management Fees. Those
fees were utilized by TCA pursuant to the Amended and Restated Omnibus Financing
Agreement which was terminated effective January 1, 2000.

                                       F-9

3.   BENEFICIAL INTEREST - LEISURE RESORT TECHNOLOGY, INC.:

On January 6, 1998, the Company paid  $5,000,000 to Leisure  Resort  Technology,
Inc.  ("Leisure")  whereby  Leisure  gave up its  beneficial  interest  in 5% of
certain fees and excess cash flows,  as defined,  of TCA and any other claims it
may have had against the Company,  TCA and TCA's partners and former partner. On
August 6, 1997,  Leisure,  a former partner of TCA, had filed a lawsuit  against
TCA, Kerzner  Investments,  former partner of TCA RJH Development  Corp. and the
Company and its owners, claiming breach of contract,  breach of fiduciary duties
and other matters in connection  with the development of the Mohegan Sun by TCA.
The  Company  agreed to  acquire  Leisure's  contractual  rights  and settle all
matters.  The Company no longer has the  obligation  to pay to Leisure 5% of the
Organizational  and  Administrative  fee, as defined in the  Organizational  and
Administrative  Services  Agreement,  and 5% of TCA's  Excess Cash as defined in
TCA's partnership  agreement.  The Company is now entitled to such cash flow. On
March 17,  1999,  the Company and  Finances'  $65 million  12-3/4%  senior notes
payable (the "$65 Million Senior Notes") were retired and on March 18, 1999, the
Company paid an additional  $2,000,000 to Leisure pursuant to the settlement and
release agreement.

The Leisure  payments plus  associated  costs were amortized on a  straight-line
basis over the remaining term of TCA's  Management  Agreement  through March 17,
1999.  As a result  of the  Relinquishment  Agreement  becoming  effective,  the
remaining  balance will be amortized over 189 months which began March 18, 1999.
Accumulated amortization at December 31, 2002 and 2001 amounts to $2,517,172 and
$2,139,182, respectively.


4.   $125 MILLION 9-1/2% SENIOR NOTES PAYABLE:

On March 17, 1999,  the Company and Finance,  issued $125 Million  Senior Notes.
Payment of the principal  of, and interest on, the $125 Million  Senior Notes is
subordinate  in right of payment  to all of their  existing  and future  secured
debts.

Interest is payable  semi-annually  in arrears on March 15 and September 15 at a
rate of 9-1/2% per annum which commenced on September 15, 1999.

The  principal  amount of the $125 Million  Senior Notes is payable on March 15,
2010.  The Company and Finance may elect to redeem the $125 Million Senior Notes
at any  time on or  after  March  15,  2004 at a  redemption  price  equal  to a
percentage  (105.182% after March 14, 2004 and declining to 104.318% after March
14, 2005, 103.455% after March 14, 2006, 102.591% after March 14, 2007, 101.727%
after March 14, 2008, 100.864% after March 14, 2009, and to 100% after March 14,
2010) of the principal  amount thereof plus accrued  interest.  The $125 Million
Senior  Notes  provide  that  upon the  occurrence  of a Change of  Control  (as
defined),  the holders thereof will have the option to require the redemption of
the  $125  Million  Senior  Notes  at a  redemption  price  equal to 101% of the
principal amount thereof plus accrued interest.


If the Company and Finance have any Company  Excess Cash, as defined,  they must
redeem the $125  Million  Senior Notes (on a  semi-annual  basis on March 15 and
September 15) equal to a percentage (109.500% after March 15, 1999 and declining
to 108.636% after March 14, 2000,  107.773% after March 14, 2001, 106.909% after
March 14, 2002,  106.045%  after March 14, 2003,  105.182% after March 14, 2004,
104.318%  after March 14, 2005,  103.455%  after March 14, 2006,  102.591% after
March 14, 2007,  101.727%  after March 14, 2008,  100.864% after March 14, 2009,
and to 100.000% after March 14, 2010). On August 1, 1999 the Company and Finance
had Company Excess Cash, as defined,  available for mandatory  redemption of the
$125 Million Senior Notes totaling approximately  $8,983,000,and  accordingly on
September  15, 1999 the Company and Finance made a mandatory  redemption of $125
Million  Senior Notes in the principal  amount of  $2,841,000 at the  redemption
price of 109.50%.  On February 1,2000 the Company and Finance had Company Excess
Cash, as defined,  available for mandatory redemption of the $125 Million Senior
Notes totaling approximately  $8,276,000 and accordingly the Company and Finance
made a mandatory redemption of $125 Million Senior Notes in the principal amount
of $2,277,000 at the  redemption  price of 108.636% on March 15, 2000. On August
1, 2000 the Company and Finance had Company  Excess Cash, as defined,  available
for mandatory redemption of the $125 Million Senior Notes totaling approximately
$5,902,000, and accordingly on September 15, 2000 the Company and Finance made a
mandatory  redemption of $125 Million  Senior Notes in the  principal  amount of
$191,000 at the  redemption  price of 108.636%.  On February 1, 2001 the Company
and  Finance had Company  Excess  Cash,  as  defined,  available  for  mandatory
redemption of the $125 Million Senior Notes totaling  approximately  $6,173,000,
and  accordingly  on March 15, 2001 the  Company  and  Finance  made a mandatory
redemption of $125 Million  Senior Notes in the principal  amount of $452,000 at
the redemption price of 107.773%.  On August 1, 2001 the Company and Finance had
Company Excess Cash, as defined,  available for mandatory redemption of the $125
Million  Senior Notes  totaling  approximately  $9,765,000,  and  accordingly on
September  15, 2001 the Company and Finance made a mandatory  redemption  of the
$125  Million  Senior  Notes  in  the  principal  amount  of  $3,805,000  at the
redemption  price of  107.773%.  On February 1, 2002 the Company and Finance had
Company Excess Cash, as defined,  available for mandatory redemption of the $125
Million  Senior Notes  totaling  approximately  $9,793,000 , and  accordingly on
March 15, 2002 the Company and Finance made a mandatory  redemption  of the $125
Million Senior Notes in the principal  amount of  $4,031,000,  at the redemption
price of 106.909%.  On August 1, 2002 the Company and Finance had Company Excess
Cash, as defined,  available for mandatory redemption of the $125 Million Senior
Notes totaling  approximately  $8,923,000 and  accordingly on September 15, 2002
the Company and Finance made a mandatory  redemption of the $125 Million  Senior
Notes in the principal amount of $3,396,000 at the redemption price of 106.909%.
On February 1, 2003 the Company and Finance had Company Excess Cash, as defined,
available for a mandatory  redemption of the $125 Million  Senior Notes totaling
$11,131,000  and  accordingly  on March 15, 2003 the Company and Finance  made a
mandatory redemption of the $125 Million Senior Notes in the principal amount of
$5,658,000 at the redemption  price of 106.045%.  In certain  circumstances,  if
either the  Company or its  partner in TCA  exercises  the option to buy or sell
partnership  interests  in TCA,  the Company  and  Finance  must redeem the $125
Million Senior Notes.

The Indenture contains certain  affirmative and negative  covenants  customarily
contained in agreements of this type,  including without  limitation,  covenants
that  restrict,  subject to specified  exceptions  the  Company's  and Finance's
ability to (i) borrow  money,  (ii) pay dividends on stock or make certain other
restricted  payments,  (iii) use assets as security in other transactions,  (iv)
make  investments,  (v) sell other assets or merge with other companies and (vi)
engage in any business  except as currently  conducted or  contemplated or amend
their relationship with TCA. The Indenture also provides for customary events of
default and the establishment of a restricted investment fund with a trustee for
interest reserves.

The fair value of the Company's  long term debt at December 31, 2002 and 2001 is
estimated to be approximately $111,787,000 and $118,897,000, respectively, based
on the quoted market price for the same issue.

                                      F-10

5.   RECONCILIATION OF FINANCIAL STATEMENT AND TAX INFORMATION:

The following is a reconciliation of net income for financial statement purposes
to net income for federal  income tax purposes for the years ended  December 31,
2002, 2001 and 2000.

<TABLE>

<S>                              <C>                        <C>                     <C>
                                      For the                   For the                  For the
                                     Year Ended                Year Ended              Year Ended
                                 December 31, 2002          December 31, 2001       December 31, 2000
                                 -----------------          -----------------       -----------------

Financial Statement
 net income                            $13,033,310                 $6,574,572              $  388,376
Financial statement equity in (income) loss of Trading Cove Associates over tax
 basis equity in (income) loss of Trading
 Cove Associates                          (437,925)                  (394,380)              1,184,388
Other                                        7,263                      6,188                   4,682
                                  ----------------          -----------------       -----------------
Federal income tax basis
 net income                            $12,602,648                 $6,186,380              $1,577,446
                                  ================          =================       =================

</TABLE>





The following is a reconciliation of members' deficiency for financial statement
purposes to members'  deficiency  for federal income tax purposes as of December
31, 2002, 2001 and 2000.

<TABLE>

<S>                                     <C>                <C>                <C>
                                            2002               2001               2000
                                        ------------       ------------       -----------

Financial statement members'
 deficiency                             $(72,465,584)      $(66,978,332)      $(71,813,244)
Adjustment for cumulative
 difference between tax basis
 of Trading Cove Associates-
 equity investment and GAAP
 basis of Trading Cove
 Associates-equity investment              1,267,791          1,655,983            466,913
Current year financial
 statement net income over
 (under) federal income tax
 basis net income                           (430,662)          (388,192)         1,189,070
                                        ------------       ------------       ------------
Federal income tax basis
 members' deficiency                    $(71,628,455)      $(65,710,541)      $(70,157,261)
                                        ============       ============       ============

</TABLE>


                                      F-11

6. CONTINGENCIES:

LEGAL PROCEEDINGS

On January 6, 1998, Leisure Resort Technology,  Inc.  ("Leisure") and defendants
Waterford Gaming,  L.L.C., Trading Cove Associates,  LMW Investments,  Inc., and
Slavik Suites,  Inc.  settled a prior lawsuit brought by Leisure.  In connection
with this  settlement,  Leisure and Trading Cove Associates,  Waterford  Gaming,
L.L.C., LMW Investments, Inc., and Slavik Suites, Inc. entered into a settlement
and release  agreement.  Pursuant  to this  settlement  and  release  agreement,
Waterford Gaming,  L.L.C.  bought out Leisure's  beneficial  interest in Trading
Cove Associates.

By complaint dated January 7, 2000, as amended February 4, 2000, Leisure filed a
four count complaint naming as defendants Waterford Gaming, L.L.C., Trading Cove
Associates, LMW Investments, Inc., Slavik Suites, Inc., Waterford Group, L.L.C.,
Len Wolman and Mark Wolman (collectively, the "Defendants"). The matter has been
transferred  to the  complex  litigation  docket and is  pending  in  Waterbury,
Connecticut.  The  complaint  alleged  breach of  fiduciary  duties,  fraudulent
non-disclosure,  violation of Connecticut Statutes Section 42-110a, et seq., and
unjust  enrichment  in  connection  with  the  negotiation  by  certain  of  the
Defendants of the settlement and release agreement. The complaint also brought a
claim for an accounting.  The complaint  seeks  unspecified  legal and equitable
damages. On February 29, 2000,  Defendants filed a Motion to Strike and a Motion
for  Summary  Judgement,  each with  respect to all  claims.  The Court  granted
Defendants'  Motion to Strike in part and denied  Defendants' Motion for Summary
Judgement,  on October 13, 2000.  The Court's  order  dismissed the claim for an
accounting and the claim under Connecticut Statutes Section 42-110a, et seq. The
Court  also  struck  the alter ego  allegations  in the  complaint  against  LMW
Investments,  Inc.,  Slavik  Suites,  Inc.,  Len  Wolman and Mark  Wolman.  In a
decision  dated  August 6, 2001,  the Court  dismissed  all claims  against  LMW
Investments, Inc., Slavik Suites, Inc., Len Wolman and Mark Wolman.

On November 15, 2000, the Company and its co-defendants  answered the complaint.
In addition,  the Company and Trading Cove Associates asserted counterclaims for
breach of the  settlement  and  release  agreement  and  breach  of the  implied
covenant  of good faith  against  Leisure  and its  president,  Lee Tyrol.  In a
decision dated June 6, 2001, the Court dismissed the  counterclaims  against Lee
Tyrol.  Leisure  has  moved  for  summary  judgement  seeking  dismissal  of the
counterclaims in full. This motion for summary judgement is pending.

Discovery  has  commenced.   Pursuant  to  the  current  scheduling  order,  all
depositions are to be completed by June 30, 2003. A trial date has not been set.

The Company believes that it has meritorious  defenses and intends to vigorously
contest the claims in this action and to assert all available  defenses.  At the
present time,  the Company is unable to express an opinion on the  likelihood of
an  unfavorable  outcome  or to give an  estimate  of the  amount  or  range  of
potential loss to the Company as a result of this litigation due to the disputed
issues of law and/or facts on which the outcome of this  litigation  depends and
due to the infancy of both the action and discovery in the action.

                                      F-12

7.  RELATED PARTY AGREEMENTS AND TRANSACTIONS:

Len Wolman, the Company's Chairman of the Board of Directors and Chief Executive
Officer, is a managing partner of TCA.

On February 9, 1998 the Development Services Agreement Phase II was entered into
between TCA and KIML.  Pursuant to the Development  Services Agreement Phase II,
TCA  subcontracted  with KIML and KIML agreed to perform those services assigned
to KIML by TCA in  order to  facilitate  TCA's  fulfillment  of its  duties  and
obligations to the Authority  under the Development  Agreement.  The Development
Services  Agreement Phase II was subsequently  assigned to Kerzner  Investments.
TCA shall pay to Kerzner Investments, as subcontractor, the Development Services
Fee Phase II equal to 3% of the development costs of the Project, less all costs
incurred by TCA in connection  with the Project.  The  Development  Services Fee
Phase II shall be paid in installments  due on December 31, 1999 and 2000 and on
the  Completion  Date,  as defined in the  Development  Agreement,  with a final
payment being made when the actual  development  costs of the Project are known.
The payment of the Development Services Fee Phase II will be made from available
cash  flow  if  any,  in  accordance  with  the  Amended  and  Restated  Omnibus
Termination  Agreement.  KIML has further  subcontracted  with  Construction  to
provide  certain  of  those  services  assigned  to  KIML  by  TCA.  This  Local
Construction  Services Agreement was also assigned to Kerzner  Investments.  The
fee  payable  by  Kerzner  Investments  to  Construction  as  and  when  Kerzner
Investments  receives payment from TCA is 20.83% of the Development Services Fee
Phase II.  Construction has subcontracted  with The Slavik Company for 14.30% of
its fee.  On April 26,  2000,  July 26,  2000 and  January  26,  2001,  TCA paid
$3,095,000,   $1,238,000  and  $6,474,000   respectively,   as  partial  payment
Development Services Fee Phase II. Construction received $644,688,  $257,875 and
$1,348,534,  respectively,  and  Construction  paid The Slavik Company  $92,190,
$36,876 and  $192,840  on April 26,  2000,  July 26, 2000 and January 26,  2001,
respectively.

Construction  is owned 50% by Mr.  Len Wolman  (the  Company's  chief  Executive
Officer and  Chairman of the Board of  Director)  and 50% by Mr. Mark Wolman ( a
member of the Company's  Board of  Directors).  Mr. Del J. Lauria (the Company's
Secretary  and a member of the Company's  Board of  Directors),  Mr.  Stephan F.
Slavik ( a member of the Company's  Board of Directors)  and Mr.  Richard Slavik
(Vice President of the Company) have a financial interest in The Slavik Company.


On September 28, 1998, the Company entered into an employment agreement with Mr.
Len Wolman.  The  employment  agreement  provides  for a base  annual  salary of
$250,000  reduced by any  amounts Mr.  Wolman  receives as a salary from TCA for
such period. Pursuant to such employment agreement, the Company shall pay to Mr.
Wolman an amount equal to 0.05% of the Revenues of the Mohegan Sun including the
expansion to the extent Mr.  Wolman has not  received  such amounts from TCA. On
and after  January  1,  2004,  the  Company  shall pay to Mr.  Wolman  incentive
compensation  based on the Revenues of the Mohegan Sun, including the expansion,
as a percentage  (ranging  from .00% to .10%) to be  determined  using a formula
attached  to  the  employment   agreement  which  compares  actual  revenues  to
predetermined  Revenue targets.  For the years ended December 31, 2002, 2001 and
2000  the  Company  paid  and   incurred   $835,086,   $707,153  and   $660,037,
respectively, pursuant to the employment agreement.

In  2002,  2001  and  2000,   approximately  $46,000,   $903,000  and  $976,000,
respectively,  was paid to the  principals and affiliates of the Company as part
of TCA's operating expenses.

In 1999, the Company  renovated Mr.  Wolman's office space at a cost of $32,413,
of which $30,000 was paid to Wolman,  Homes Inc., a related  party.  Cost of the
improvement is being depreciated over five years . Expense for each of the years
ended December 31, 2002, 2001 and 2000 was $6,480.

Waterford  Group,  Slavik  and the other  principals  of  Waterford  Group  have
interests  in and may acquire  interests in hotels in  southeastern  Connecticut
which have or may have  arrangements with the Mohegan Sun to reserve and provide
hotel rooms to patrons of the Mohegan Sun.

                                      F-13


(c)  Reports on Form 8-K
     -------------------

               (i)  Form 8-K filed on November 13, 2002

                    Item 5.

                    The Mohegan Tribal Gaming Authority (the "Authority") filed:
                    i) Form 10-Q/A for the quarter ended  December 31, 2000, ii)
                    Form 10-Q/A for the quarter ended March 31, 2001,  iii) Form
                    10-Q/A for the quarter ended June 30, 2001,  iv) Form 10-K/A
                    for the fiscal year ended September 30, 2001, v) Form 10-Q/A
                    for the quarter ended December 31, 2001, vi) Form 10-Q/A for
                    the  quarter  ended  March 31, 2002 and vii) Form 10-Q/A for
                    the quarter  ended June 30, 2002 a copy of each of which has
                    been filed as an exhibit to this report and is  incorporated
                    by reference to the  Authority's  electronic  filing of such
                    reports  on Form  10-Q/A  and Form  10-K/A,  Securities  and
                    Exchange Commission file reference no. 033-80655.

                    Date of Report: November 12, 2002

              (ii)  Form 8-K filed on December 6, 2002

                    Item 5.

                    On December 5, 2002,  the Mohegan  Tribal  Gaming  Authority
                    (the  "Authority")  filed a press release report on Form 8-K
                    for the fourth  quarter and fiscal year ended  September 30,
                    2002,  a copy of which has been  filed as an exhibit to this
                    report and is  incorporated  by reference to the Authority's
                    electronic filing of such report on Form 8-K, Securities and
                    Exchange Commission file reference no. 033-80655.

                    Date of Report: December 5, 2002

             (iii)  Form 8-K filed on December 20, 2002

                    Item 5.

                    On December 19, 2002,  the Mohegan  Tribal Gaming  Authority
                    (the  "Authority")  filed its annual report on Form 10-K for
                    the year ended  September 30, 2002, a copy of which has been
                    filed as an exhibit to this  report and is  incorporated  by
                    reference  to the  Authority's  electronic  filing  of  such
                    report on Form 10-K, Securities and Exchange Commission file
                    reference no. 033-80655

                    Date of Report: December 19, 2002

              (iv)  Form 8-K filed on February 3, 2003

                    Item 5.

                    On January 29, 2003,  the Mohegan  Tribal  Gaming  Authority
                    (the  "Authority")  filed a copy of  Amendment  No. 6 to its
                    senior credit facility (the "Amendment") on Form 8-K, a copy
                    of which has been filed as an exhibit to this  report and is
                    incorporated  by  reference  to the  Authority's  electronic
                    filing of such report on Form 8-K,  Securities  and Exchange
                    Commission  file  reference  no.  033-80655.  The  Amendment
                    allows  the  Authority  to create a new  subsidiary  for the
                    purpose of acquiring a woman's professional  basketball team
                    franchise.

                    On January 30, 2003,  the Mohegan  Tribal  Gaming  Authority
                    (the "Authority")  filed a press release report on Form 8-K,
                    announcing   its  first  quarter  ended  December  31,  2002
                    operating  results,  a copy of which  has  been  filed as an
                    exhibit to this report and is  incorporated  by reference to
                    the  Authority's  electronic  filing of such  report on Form
                    8-K,  Securities and Exchange  Commission file reference no.
                    033-80655.

                    On January 30, 2003,  the Mohegan  Tribal  Gaming  Authority
                    (the  "Authority")  filed a copy of a Membership  Agreement,
                    dated January 28, 2003, by and among WNBA,  LLC, the Mohegan
                    Basketball Club LLC, the Mohegan Tribal Gaming Authority and
                    the Mohegan Tribe of Indians of  Connecticut  on Form 8-K, a
                    copy of which has been filed as an  exhibit  to this  report
                    and  is   incorporated   by  reference  to  the  Authority's
                    electronic filing of such report on Form 8-K, Securities and
                    Exchange Commission file reference no. 033-80655.

                    Date of Report: January 29, 2003

               (v)  Form 8-K filed on February 13, 2003

                    Item 5.

                    On February 13, 2003,  the Mohegan  Tribal Gaming  Authority
                    (the  "Authority")  filed its quarterly  report on Form 10-Q
                    for the quarter ended December 31, 2002, a copy of which has
                    been filed as an exhibit to this report and is  incorporated
                    by reference to the  Authority's  electronic  filing of such
                    report on Form 10-Q, Securities and Exchange Commission file
                    reference no. 033-80655.

                    Date of Report: February 13, 2003



                                       21


Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities  and
Exchange Act of 1934, as amended,  the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.



                         WATERFORD GAMING, L.L.C.


Date: March 26, 2003    By: /s/ Len Wolman
                        Len Wolman, Chairman of the Board of Directors,
                        Chief Executive Officer


Date: March 26, 2003    By: /s/ Alan Angel
                       Alan Angel, Chief Financial Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed by the following persons on behalf of the registrant
and in the capacities indicated on March 26, 2003.

SIGNATURE                      TITLE




/s/ Len Wolman                 Chairman of the Board of Directors,
-------------------            Chief Executive Officer
Len Wolman





/s/ Del J. Lauria              Member of the Board of Directors,
--------------------           Secretary
Del J. Lauria





/s/ Mark Wolman                Member of the Board of Directors
--------------------
Mark Wolman





/s/ Stephan F. Slavik          Member of the Board of Directors
---------------------
Stephan F. Slavik


                                       22

                                  CERTIFICATION

I, Len Wolman, certify that:

1. I have reviewed this annual report on Form 10-K of Waterford  Gaming, LLC;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a)  Designed such  disclosure  controls and  procedures to ensure that material
     information relating to the registrant,  and any consolidated subsidiaries,
     is made known to us by others within the  registrant,  particularly  during
     the period in which this annual report is being prepared;

(b)  Evaluated the  effectiveness  of the registrant's  disclosure  controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     annual report (the "Evaluation Date"); and

(c)  Presented in this annual report our conclusions  about the effectiveness of
     the disclosure  controls and  procedures  based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the registrant's board
of directors (or persons performing equivalent functions):

(a)  All  significant  deficiencies  in the  design  or  operation  of  internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

(b)  Any fraud,  whether or not  material,  that  involves  management  or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: March 26, 2003





/s/ Len Wolman                 Chief Executive Officer
----------------------
Len Wolman


                                       23

                                  CERTIFICATION

I, Alan Angel, certify that:

1. I have reviewed this annual report on Form 10-K of Waterford  Gaming, LLC;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a)  Designed such  disclosure  controls and  procedures to ensure that material
     information relating to the registrant,  and any consolidated subsidiaries,
     is made known to us by others within the  registrant,  particularly  during
     the period in which this annual report is being prepared;

(b)  Evaluated the  effectiveness  of the registrant's  disclosure  controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     annual report (the '"Evaluation Date"); and

(c)  Presented in this annual report our conclusions  about the effectiveness of
     the disclosure  controls and  procedures  based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the registrant's board
of directors (or persons performing equivalent functions):

(a)  All  significant  deficiencies  in the  design  or  operation  of  internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

(b)  Any fraud,  whether or not  material,  that  involves  management  or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: March 26, 2003





/s/ Alan Angel                 Chief Financial Officer
----------------------
Alan Angel


                                       24